Guest Article (7/10/2002)

Pension Legislative Update

The recent media attention on accounting irregularities has not gone unnoticed by Congress. As you may know, before the July 4th recess, the Senate Banking Committee reached bipartisan agreement on legislation to reform the accounting industry. The Senate will be taking up this legislation this week. This is relevant for ASPA members because it is increasingly likely that the accounting reform bill could become a vehicle for pension legislation.

The Senate Finance Committee is scheduled to mark-up pension legislation this Thursday. ASPA's Government Affairs Committee was very involved in the development of this legislation, and we were able to obtain some positive changes and prevent some negative proposals. You can read a complete description of the proposed bill at http://www.house.gov/jct/x-74-02.pdf.

In summary, the proposed legislation includes:

At this point, it is still unclear whether the package will be added as part of the accounting reform bill, or perhaps as a separate measure either later this month or in September. If the pension bill is delayed until September, the differences between the Finance Committee bill and the HELP committee (Sen. Kennedy's committee) bill will once again have to be resolved. There are a number of procedural issues involved that could prevent current consideration of the pension legislation. Most significantly, the pension bill, since it includes tax changes, could open the accounting reform bill to other tax amendments such as the permanent repeal of the estate tax. Thus, the Democratic leadership might prefer to keep the pension bill separate. On the other hand, political pressure might force a limited deal to include the pension legislation now. Given the present dynamic political climate, the only thing certain is that it is uncertain. We will continue to keep you posted.

Brian H. Graff, Esq. is Executive Director of the American Society of Pension Actuaries. An attorney and certified public accountant, Mr. Graff was formerly legislative counsel to the U.S. Congress Joint Committee on Taxation, where he provided policy and technical analysis relating to pensions and employee benefits, health care, Social Security, and worker classification to members of Congress and their staffs. Prior to working on Capitol Hill, Mr. Graff was associated with the Washington, D.C. law firm of Groom and Nordberg, Chtd., which specializes in employee benefits. He can be reached at bgraff@asppa.org.

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