The House voted 294-132 Thursday to pass pension reform legislation that includes several provisions sought by the life insurance industry.[@@]
Passed by a vote of 294-132, the Pension Protection Act, or H.R. 2830, includes provisions that would encourage employers to offer automatic enrollment in 401(k) plans as well as to allow sale of a “combination insurance product” that would let annuities include riders for long term care insurance coverage.
The bill also would clarify the rules governing the selection of annuities by an employer and the options an employer could offer employees through a 401(k) program.
The Senate passed its version of the pension reform bill in November.
Passage of the House version was smoothed after the sponsors of the bill, Rep. John Boehner, R-Ohio, the chairman of the House Committee on Education and the Workforce and Rep. Sam Johnson, R-Texas, chairman of the Employer-Employee Relations Subcommittee, won the support of the United Auto Workers by agreeing to make changes to some provisions in the bill.
Among those voting for the bill were 70 Democrats, including Rep. John Dingell, D-Mich., the most senior member of the House, as well as Education & the Workforce Committee members Rep. Carolyn McCarthy, D-NY, Rep. Dale Kildee, D-Mich., Rep. David Wu, D-Ore., and Rep. Rob Andrews, D-NJ.
“I’m pleased a number of Democrats were willing to cross party lines and support this legislation on behalf of workers, retirees, and taxpayers alike,” Boehner says. “I hope this bipartisan cooperation continues as we work with the Senate to craft a final measure to send to President Bush.”
The House version of the bill does not include provisions addressing the needs of the airline industry, but Boehner told House members who expressed concern about the omission that airline industry language would be added to the bill during conference negotiations with the Senate.
Most of the floor debate about H.R. 2830 focused on provisions dealing with defined benefit pension plans and defined contribution retirement plans.
Johnson says H.R. 3820 is a “fair and tough bill.”
“Our bill makes companies put their money behind their promises and gives employees good information on the health of their pension plan,” Johnson says, “We need to get this bill to conference with the Senate and then quickly enacted early next year so that it will provide certainty and stability in the private pension system.”
Even some Democratic opponents of the bill said they like many of the bill’s provisions.
“On balance this bill would do more harm than good,” Rep. Ben Cardin, D-Md., said on the House floor.
But Cardin praised an H.R. 2830 provision that would extend the “saver’s credit” for low-income and moderate-income Americans and provisions dealing with defined contribution plans, such as those allowing for automatic enrollment of employees in a 401(k).
Both Republicans and Democrats criticized H.R. 2830 defined benefit plan provisions. Some lawmakers said stricter funding rules included in the bill could discourage employers from offering defined benefit plans. Other lawmakers said the bill could make it too easy for employers to dump responsibility for pension plans onto the shoulders of the Pension Benefit Guaranty Corp. pension insurance program.
During floor debate, opponents compared the bill to efforts made earlier this year to “privatize” the Social Security system.
“This whole year has been about doing it to people,” said Rep. Jim McDermott, D-Wash., who said both efforts would effectively force retirees to make it on their own with no government support. McDermott also referred to the bill as “abusive, irresponsible and morally bankrupt.”