April 2, 2004
In this issue:
- H.R. 3108 Conference Report Approved in House; Senate Action Still Uncertain
- New Health Savings Account Information Now Available
- Banking Committee Continues Hearings on Mutual Fund Reform
H.R. 3108 Conference Report Approved in House; Senate Action Still Uncertain
On April 2, The House of Representatives approved (by a vote of 336-69) the conference report of the Pension Funding Equity Act (H.R. 3108), which contains a two-year replacement of the defunct 30-year Treasury bond rate with a composite rate based on long-term corporate bonds for purposes of calculating plan liabilities and any Pension Benefit Guaranty Corporation variable rate premiums. The House approved the bill after a motion to recommit (which would have sent the bill back to conference) was defeated by a vote of 195-217.
The conference report, completed April 1, also includes deficit reduction contribution relief for airlines and steel and a modest multiemployer relief provision. The agreement will also permit the use of the 30-year Treasury rate for purposes of maximizing the limit on deductible contributions, so that employers that want to make larger contributions may do so. Text of the conference report, an outline of the conference report, and a manager's statement are available on the Council Web site.
The bill now faces an uphill battle in the Senate, where Democrats have opposed the lack of more comprehensive multiemployer plan relief. While Council staff is working to mobilize bipartisan support in the Senate, the possibility still exists for a Democratic filibuster. The Bush Administration has indicated it will not oppose the compromise, and if passed by the House and Senate the bill will likely be signed by the President.
For more information, contact Diann Howland, Council vice president, retirement policy, at (202) 289-6700.
New Health Savings Account Information Now Available
The U.S. Treasury Department has posted new Frequently Asked Questions on Health Savings Accounts (HSAs). The questions are tailored to individuals who would like to learn more about how they can find and use HSAs. This is part of a broader campaign to provide information about HSAs in a newly-dedicated section of Treasury's Web site. Treasury has also established a new e-mail address for responding to inquiries about HSAs: HSAinfo@do.treas.gov.
On Tuesday, April 6 at 3:30 p.m. (Eastern Time) the Council will hold a Benefits Briefing conference call for Council members to further explain and answer questions about the HSA guidance that Treasury released on March 30. To participate in the call, please RSVP to the Council using this link. Susan Relland, Council health policy legal counsel, will go through the guidance and then be joined by Chip Kerby of McDermott, Will & Emery, Joe Walshe of PricewaterhouseCoopers, and Jeff Munn of Hewitt Associates for a Q&A portion of the call to address questions about the new Treasury rules as well as answer other concerns about the emerging federal standards for HSAs. New summaries of the March 30 guidance drafted by Groom Law Group and Kilpatrick Stockton LLP are now available on the Council's website. For additional information, please contact Susan Relland at (202) 289-6700.
Banking Committee Continues Hearings on Mutual Fund Reform
On March 31, the Senate Banking, Housing and Urban Affairs Committee continued its examination of the mutual fund industry with two hearings. A morning hearing focused on "soft dollars" (a return of a portion of fees charged in the form of products and services), while an afternoon hearing focused on fund costs and distribution practices.
The afternoon hearing heard from two panels of witnesses. The first panel, consisting of Senators from the Senate Committee on Governmental Affairs, focused on pending mutual fund reform bills. In response to a question from Committee Chairman Richard Shelby (R-AL), panelists disagreed on the "hard 4 p.m." late trading proposal. Senator Susan Collins (R-ME) indicated she supports a hard close, while Senator Daniel Akaka (D-HI) has serious concerns due to the impact a hard close, tied to the Eastern time zone, would have on his constituents in Hawaii. The second panel focused on mutual fund fees charged to investors and included witnesses from research organizations and investment companies.
For more information, contact Jan Jacobson, Council director, retirement policy, at 202-289-6700.
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.