October 8, 2004
In this issue:
- Miller Introduces Pension Fairness Act
- House Passes Conference Report of Tax Bill with Deferred Compensation Provisions; Side-by-Side Now Available
Miller Introduces Pension Fairness Act
On October 8, Representative George Miller (D-CA) introduced the "Pension Fairness Act," a bill that would prohibit employers from paying or promising deferred compensation to executive officers or directors (as defined in the Sarbanes-Oxley accounting reform bill of 2002) for five years following:
- a shift in pension liabilities to the Pension Benefit Guaranty Corporation during bankruptcy, or
- conversion to a cash balance plan (where choice between the new plan and the prior plan is not offered to participants with at least 10 years of service).
Bill text is currently available.
The bill appears to have been introduced for political purposes, as a response to recent media attention on deferred compensation plans, cash balance conversions and various financial developments in the airline industry. The House of Representatives will not take action on the bill before Congress takes its recess for the elections, and it is unlikely that legislators will address the bill during a post-election "lame-duck" session. For more information, contact Diann Howland, Council vice president, retirement policy, at (202) 289-6700.
House Passes Conference Report of Tax Bill with Deferred Compensation Provisions; Side-by-Side Now Available
Late on October 7, the House of Representatives approved the conference report (beginning on Page 510) of the tax bill (H.R. 4520/S. 1637) containing nonqualified deferred compensation provisions. Senate approval of the bill is imminent.
The Council will hold a Benefits Briefing conference call on Tuesday, October 12, at 2:00 p.m. (Eastern Time) regarding the deferred compensation legislation. A side-by-side chart comparing the bill's deferred compensation provisions to current law, prepared for the Council by the Benefits Group of Davis and Harman, is now available. For more information, contact Lynn Dudley, Council vice president and senior counsel, 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.