CBF Backs Pension Reform Bill.

• Position: Committee on Benefits Finance

FEI's Committee on Benefits Finance has been pushing the Portman/Cardin proposal that recently passed the House. The original Hill call to action is presently being modified for the Senate, where the bill has been sitting in committee. CBF Chairman Frank Becker had sent House members a letter supporting the measure, which reads in part:

"On behalf of the Financial Executives Institute's Committee on Benefits Finance, I am writing this letter to express CBF's support for the pension reform legislation H.R. 1102, the Comprehensive Retirement Security and Pension Reform Act of 2000...

"Since 1974, Congress has repeatedly reduced the benefits that can be provided in tax-qualified plans. This consistent pattern of reductions in benefits has discouraged employers from establishing new and maintaining exist-ing tax-qualified plans. The pension reform legislation sponsored by Congressman Archer (R-TX) and co-sponsored by Congressmen Rob Portman (R-OH) and Ben Cardin (D-MD) would restore the limits on contributions and benefits that can be provided in qualified plans to levels that were in effect in the past. This change would send a strong message that Congress supports the private pension system, and, as a direct result, would enhance incentives for employers to establish and improve their plans and permit employees to increase their retirement savings.

"Furthermore, under current law, employers may deduct dividends paid on employer stock held in an ESOP, provided that either the dividends are paid out in cash to plan participants or the dividends are used to make loan payments for a leveraged ESOP. No deduction is permitted for dividends paid to...