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Rescue Plan May Shut Out Non-Qualified Plans

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House Democrats are expecting the $700 billion financial institution rescue plan bill to come to the House floor Monday.

House Speaker Nancy Pelosi, D-Calif., and Sen. Christopher Dodd, D-Conn., chairman of the Senate Committee on Banking, Housing and Urban Affairs, have released a new draft that may be similar to the version that will come up in the House.

Like early versions of the bill, the new version would let insurers participate in the proposed troubled asset relief program, which would give the Treasury Department the authority to help financial institutions dispose of troubled assets.

At press time, the new version of the bill, which would create the Emergency Economic Stabilization Act of 2008, did not have a bill number.

The authors of the original, 3-page Treasury Department draft, posted Monday on the Web site of the National Association of Federal Credit Unions, Washington, did not mention retirement plans.

The authors of a revision posted Monday on the Web site of the House Financial Services Committee states that one purpose of the TARP would be to protect individual investors, including retirement plan investors.

The version posted Sunday by Pelosi and others stated that “nothing in this act prevents the Secretary from protecting the retirement security of Americans by purchasing troubled assets held by or on behalf of an eligible retirement plan other than a plan described in section 409A of the Internal Revenue Code of 1986.”

Pelosi reportedly decided to let the EESA bill go to the House after Republican leaders said they expect half of House Republicans to vote for the bill.


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