DC Speaks: With Progress, New Problems on Pension Plan Legislation
Heller, Michele, American Banker
Before anyone knew Enron Corp. would implode and take employee retirement savings with it, Liz Varley and other securities industry officials were urging lawmakers to lift legal restrictions that prevent businesses from giving their employees access to investment advisers.
Now, the sensational collapse of the energy trader has given their effort momentum, but they worry it could spin out of control.
President Bush and lawmakers on both sides of the aisle are pushing for a comprehensive overhaul of pension laws that would incorporate investment-advice authority with provisions that, industry officials fear, could have the unintended consequences of limiting demand for their products and services and of increasing their liability.
"Our biggest concern is about employers' choice and ability to design a plan the way they think is best for them," said Ms. Varley, a vice president and the director of retirement policy at the Securities Industries Association.
If Congress goes too far, "it could really discourage a lot of new plan formation. We don't want to do anything that would discourage (employers) from offering these plans," said Ms. Varley, a lawyer who joined the SIA three years ago after working on Social Security and pension issues for Sen. Charles Grassley, R-Iowa.
She said the biggest disincentives to employers' offering and contributing to retirement plans are in the bill Senate Democrats introduced Wednesday and hope to move out of committee by the spring recess that is scheduled to begin March 25.
Among other things, the bill would prohibit pension fund administrators from also serving as advisers to the funds they manage.
"We don't think it will increase advice to rank-and-file workers," Ms. Varley said. "It would be difficult for an employer to find someone who is truly independent. …