HighSpeedClimb
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Lawmakers said to have deal on pension bill
Wed Jul 19, 2006 7:18 PM ET
By Susan Cornwell
WASHINGTON (Reuters) - U.S. House and Senate negotiators reached a tentative agreement on legislation to overhaul the employer-provided pension system the chairman of the negotiating group said on Wednesday.
Sen. Mike Enzi, speaking after a negotiating session, said the provisions would be put in writing and the group would meet again on Thursday to finalize the deal.
The Wyoming Republican said issues such as special aid for struggling airlines had been resolved, but declined to give details. He said he expected the completed bill to be voted on in the U.S. House of Representatives next week and then in the U.S. Senate shortly thereafter.
But other lawmakers were less definitive.
"There are some moving parts still," House Majority Leader John Boehner said. The Ohio Republican left the meeting a few minutes before Enzi.
The U.S. system of employer-provided pensions, which pay a fixed amount to retirees, is underfunded by $450 billion and the federal agency that insures them is $22.8 billion in deficit.
Lawmakers are rewriting the rules to try to make companies fully fund these traditional "defined benefit" pensions, which have a payout at retirement based on earnings and years of service. Some airlines, as well as some defense contractors, are seeking special exemptions.
Bankrupt Northwest Airlines Corp. and Delta Air Lines Inc. want 20 years to stretch out pension payments. American Airlines and Continental Airlines, while not in bankruptcy, have also sought relief.
Business lobbyists close to the talks said that while lawmakers were comfortable with providing some airline aid, they had been discussing a range of between 14 and 20 years and might not plug in the number until the last minute.
Defense companies with many employees and fixed government contracts would also like relief from rules that raise pension costs. A plan by Rep. Howard McKeon, a California Republican, would delay the effective date for companies with more than half their business in defense contracts.
Most of the bill deals with defined benefit pensions, which are mainly in older industries; 44 million Americans have them. In addition to making all companies fully fund their plans over several years, the lawmakers are expected to impose tougher funding rules on pension plans deemed "at risk" of default.
Boehner indicated there may still be differences affecting 401(k) plans, which differ from traditional pensions and are basically retirement savings plans.
The issue is whether providers of 401(k)s should be allowed to give investment advice to participants.
Wed Jul 19, 2006 7:18 PM ET
By Susan Cornwell
WASHINGTON (Reuters) - U.S. House and Senate negotiators reached a tentative agreement on legislation to overhaul the employer-provided pension system the chairman of the negotiating group said on Wednesday.
Sen. Mike Enzi, speaking after a negotiating session, said the provisions would be put in writing and the group would meet again on Thursday to finalize the deal.
The Wyoming Republican said issues such as special aid for struggling airlines had been resolved, but declined to give details. He said he expected the completed bill to be voted on in the U.S. House of Representatives next week and then in the U.S. Senate shortly thereafter.
But other lawmakers were less definitive.
"There are some moving parts still," House Majority Leader John Boehner said. The Ohio Republican left the meeting a few minutes before Enzi.
The U.S. system of employer-provided pensions, which pay a fixed amount to retirees, is underfunded by $450 billion and the federal agency that insures them is $22.8 billion in deficit.
Lawmakers are rewriting the rules to try to make companies fully fund these traditional "defined benefit" pensions, which have a payout at retirement based on earnings and years of service. Some airlines, as well as some defense contractors, are seeking special exemptions.
Bankrupt Northwest Airlines Corp. and Delta Air Lines Inc. want 20 years to stretch out pension payments. American Airlines and Continental Airlines, while not in bankruptcy, have also sought relief.
Business lobbyists close to the talks said that while lawmakers were comfortable with providing some airline aid, they had been discussing a range of between 14 and 20 years and might not plug in the number until the last minute.
Defense companies with many employees and fixed government contracts would also like relief from rules that raise pension costs. A plan by Rep. Howard McKeon, a California Republican, would delay the effective date for companies with more than half their business in defense contracts.
Most of the bill deals with defined benefit pensions, which are mainly in older industries; 44 million Americans have them. In addition to making all companies fully fund their plans over several years, the lawmakers are expected to impose tougher funding rules on pension plans deemed "at risk" of default.
Boehner indicated there may still be differences affecting 401(k) plans, which differ from traditional pensions and are basically retirement savings plans.
The issue is whether providers of 401(k)s should be allowed to give investment advice to participants.
TC
