A provision contained in pension benefit reform legislation allowing insurance agents to offer investment advice to their 401(k) customers remains up in the air, said a key member of the conference committee drafting a final bill.

In comments to tax lobbyists at a fund-raiser here, Sen. Max Baucus, D-Mont., ranking minority member of the Senate Finance Committee, also said negotiations aimed at completing work on the bill began in earnest May 23, and conferees are aiming to complete work on the bill by June 16.

Baucus also told those attending the lunch that there is speculation that some effort will be made by Republicans to attach legislation repealing the estate tax to the bill.

But Marc Cadin, a lobbyist with the Association for Advanced Life Underwriting, said, “there was no credence” to the speculation and that a vote on estate tax repeal is likely to be held before work on the pension bill is completed.

Congress is out this week for the Memorial Day recess but returns to work next week.

Cadin, who did not attend the fund-raiser but who heard about the speculation elsewhere, said AALU believes that supporters of full repeal still lack the 60 votes needed to close off debate on such legislation in the Senate.

While there is some talk that a vote on compromise legislation raising the threshold for paying estate taxes and lowering the rate on taxes above the threshold level, Cadin said most observers believe such a vote would not likely occur this year.

Regarding investment advice, several of those who attended the Baucus fund-raiser said Rep. John Boehner, R-Ohio, House Majority Leader, and Sen. Jeff Bingaman, D-N.M., “continue to battle it out.”

Boehner recently said he has been in favor of reducing the conflict-of-interest provisions in ERISA and, therefore, allowing agents to provide investment advice, for seven years. But, Bingaman, with the support of Sen. Charles Grassley, R-Iowa, chairman of the Finance Committee, remains concerned about relaxing conflict-of-interest provisions in ERISA.

Asked about its position on the issue, a staff official of the American Council of Life Insurers said the ACLI “supports the House version of investment advice.”

The staff official said, “It will provide plan participants access to the best advice available.”

While the insurance industry plays a key role in funding defined benefit plans, its major interests in the legislation are provisions that add a long term care rider to annuities and provide for automatic enrollment in 401(k) programs for new employees, as well as the House provision on investment advice.

Other sources familiar with the issues said that because of the hit to revenues, conferees might decide to phase in the provision adding an LTC rider to annuities.

The industry also wants included in the final bill some language that would codify current tax treatment of corporate-owned life insurance and establish certain best practices for the product’s sale.