BENEFITS BYTE

January 26, 2004
BB 04—7

In this issue:

  • Votes on Interest Rate Replacement Legislation Expected Tuesday or Wednesday
  • Mark-up on COLI Delayed

Votes on Interest Rate Replacement
Legislation Expected Tuesday or Wednesday

The Senate continues to deliberate the interest rate replacement legislation (the Pension Funding Equity Act, H.R. 3108), permitting senators to address concerns about the legislation and the proposed substitute amendment offered jointly by Senate Finance Committee Chairman Charles Grassley (R-IA), Health, Education, Labor and Pension (HELP) Committee Chairman Judd Gregg (R-NH), and the ranking minority members of those committees, Senators Max Baucus (D-MT) and Edward Kennedy (D-MA). This amendment would make important technical corrections and add a two-year relief provision for multiemployer plans and companies affected by the deficit reduction contribution (DRC).

Since this amendment was offered, the board of the Pension Benefit Guaranty Corporation (comprised of the secretaries of Labor, Treasury and Commerce) has expressed its opposition to the inclusion of DRC and multiemployer plan relief, indicating that it will recommend a presidential veto if such proposals are included in the final legislation. Indications from Congressional staff close to the process suggest that the letter will not affect the expected schedule for consideration of H.R. 3108, with votes likely either Tuesday or Wednesday. The Statement of Position issued by the Administration previously did not mention a possible veto. However, we continue to urge you to contact your senators to stress the importance of passing H.R. 3108.

For more information, contact Lynn Dudley, Council vice president & senior counsel, at 202-289-6700.

Mark-up on COLI Delayed

The Senate Finance Committee has announced that the mark-up of the corporate owned life insurance (COLI) provisions included in the National Employee Savings and Trust Equity Guarantee Act (NESTEG) – originally scheduled for January 28 – has been rescheduled for February 2. If this new target date is firm, the Chairman’s mark for that portion of NESTEG would be released January 29 and amendments would be filed on January 30. Currently, a draft of the Chairman’s mark is available on the Council Web site. Numerous amendments are expected during the mark-up and Senate Finance Committee Chairman Charles Grassley (R-IA) has indicated he will require a roll call vote on several amendments including those prohibiting any retaliation on employees for failure to consent to be covered by a COLI policy, the required inclusion of the face value of the policy in writing on employee consent forms, the required re-consent at separation from service and additional penalties for failure to comply with COLI consent requirements.

For more information, contact Lynn Dudley, Council vice president & senior counsel, at 202-289-6700.

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The American Benefits Council is the national trade association for companies concerned about federal legislation and regulations affecting all aspects of the employee benefits system. The Council's members represent the entire spectrum of the private employee benefits community and either sponsor directly or administer retirement and health plans covering more than 100 million Americans.