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Lawmakers Sculpt Pension Bill

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Members of a congressional conference committee might agree to a pension reform bill provision that would phase in permission for insurers to include long term care benefits riders with annuities.

Members of the conference committee also might, or might not, include the House version of a provision that would let insurance agents and other financial professionals provide investment advice to members of retirement plans. (The American Council of Life Insurers, Washington, likes the House version.)

And there is even some talk that an estate tax repeal provision might sneak into the pension reform bill.

Members of conference committee hope to resolve their differences and complete work on the pension reform bill by June 16.

Negotiations aimed at completing work on the pension bill began in earnest May 23, according to comments that Sen. Max Baucus, D-Mont., made to tax lobbyists at a fundraiser at a Washington steakhouse.

Baucus, the most senior Democrat on the Senate Finance Committee, also told the lobbyists about the speculation that Republicans might attach estate tax repeal to the pension bill.

Marc Cadin, a lobbyist with the Association for Advanced Life Underwriting, Falls Church, Va., who did not attend the fundraiser, said “there was no credence” to the suggestion that estate tax repeal might show up in the pension bill.

Congress probably will vote on repealing the estate tax before the conference committee completes work on the pension bill, Cadin says.

The AALU believes that supporters of full repeal still lack the 60 votes needed to close off debate on such legislation in the Senate, Cadin adds.

A number of other provisions that could affect life insurers have shown up in the House version of the pension bill, the Senate version or both.

The main body of the bill, which deals with efforts to shore up defined benefit pension plans, could affect life insurers that sell group annuities and other products to pension plan sponsors.

Other provisions of interest include the annuity LTC rider provision; a provision that would encourage employers to enroll employees in 401(k) plans automatically; a provision that would establish guidelines for the sale of corporate-owned life insurance and codify current COLI tax treatment; and the clashing House and Senate retirement plan investment advice provisions.

Some sources say members of the conference committee are thinking about phasing in the LTC rider provision because of the possibility that the provision might hurt federal tax revenue.

The heated battle over the investment advice provision is pitting against House Majority Leader John Boehner, R-Ohio, against Sen. Jeff Bingaman, D-N.M.

Boehner favors easing of conflict-of-interest provisions now included in the Employee Retirement Income Security Act.

Bingaman, with the support of Sen. Charles Grassley, R-Iowa, chairman of the Finance panel, is defending the conflict-of-interest provisions.


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