Washington Perspective, August/September 2006

President Bush Signs Pension Bill

President George Bush signed the Pension Protection Act of 2006 into law on Aug. 17, after more than five months of negotiations by House and Senate leaders.

The new law, PL 109-280, contains a number of reform provisions that will help keep defined contribution and deferred compensation plans’ options from reverting back to those established prior to the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA). [more on the Pension Protection Act of 2006]

Senate Resolution Encourages Saving for Retirement

ICMA-RC has partnered with the National Association of Government Defined Contribution Administrators (NAGDCA) to raise awareness about the importance of saving for retirement and communicating that message at the national level through a new Senate resolution. Senators Gordon Smith (R-OR) and Kent Conrad (D-MT) recently introduced the resolution (S. Res. 550), which establishes National Save for Retirement Week, an event created to elevate public knowledge about retirement savings and to encourage employees to save in their employer-sponsored plans, slated for Oct. 22–28 this year. [more on National Save for Retirement Week]

NASRA Writes Letter to Grassley

The National Association of State Retirement Administrators recently sent a letter to the chairman of the Senate Finance Committee requesting assurance that a study by the Government Accountability Office (GAO) on the financial condition of state and local government defined benefit pension systems accurately portrays the differences between state and local government systems. [more on NASRA and the GAO study]

401(k) Provision Not Included in Pension Protection Act

The Pension Protection Act of 2006, which was signed into law Aug. 17, does not include a provision to allow for 401(k) plans for public sector employees (beyond those currently grandfathered). The provision was strongly opposed by public sector groups and it carried with it a significant revenue impact. [more on the exclusion of 401(k)s]

Legislation to Key in on Women’s Retirement Savings

Senators Gordon Smith (R-OR), chairman of the Senate’s Special Committee on Aging, and Kent Conrad (D-ND), who together co-sponsored the Retirement Savings and Security Act of 2005, a bipartisan legislation to boost worker savings, are teaming up once again to encourage Americans, and women in particular, to save for retirement. The legislation, which is currently still in the drafting phase, places heavy emphasis on encouraging and educating women—who tend to live longer and earn less than men—to save. [more on encouraging women’s savings]