GOP's Victory Clears Some Roadblocks to Pension
Pensions & Investments (11/02) Vol. 30, No. 23 p.1; Anand, Vineeta

The Republican-controlled Senate is expected to finalize higher contribution limits on retirement plans and individual retirement accounts early next year, as well as move forward with the pension law changes President Bush proposed after the Enron debacle, which were already approved by the House in May. Though Groom Law Group partner and former Republican House Ways and Means Committee tax counsel Brigen Winters says the Republican victory will facilitate the passage of pension legislation, industry observers say the slim majority will force them to push for smaller-scale changes. The Republicans are also likely to scrap provisions favored by Democrats to cut the amount of company stock in 401(k) plans, push for rules that let retirement plan providers give investment advice, and consider eliminating the 30-year Treasury bill as the benchmark for determining insurance premiums and the value of pension fund liabilities. Rather than focus on protecting participants without changing the system, Republicans are expected to expand pension and retirement plans, possibly adding 401(k)-style benefits to standard defined benefit plans, permitting employers to use surplus pension assets to fund matching benefits, and allowing employees to work part-time while collecting pension benefits. Meanwhile, pension funds did not fare well in some state votes. In South Carolina, for instance, voters opposed an amendment that would have let the state budget and control board manage the South Carolina Retirement System's assets, which would have expanded the system's stock investments beyond domestic equities.

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