Agreement close on pension bill, lawmakers say

By Susan Cornwell

WASHINGTON (Reuters) – An agreement is close on U.S.
legislation to stabilize the system of employer-provided
pensions, key lawmakers involved in the months-long
negotiations said on Tuesday.

Negotiators only have “loose ends” to tie up on major
issues involved in the bill, and parts of it are already being
drafted into legislative language, Senate Finance Committee
Chairman Charles Grassley told reporters.

“There’s still some loose ends to be finalized on the major
issues, but they are really loose ends,” said Grassley, an Iowa
Republican.

“And then there’s a lot of dogs and cats that have to be
dealt with,” he added, referring to more minor issues. He gave
few details, but said lawmakers wanted to finish the bill and
get it passed within the next three weeks.

Other lawmakers also seemed more upbeat about the project
than they were last month, before they had a brief recess.

The negotiators are trying to write a compromise version of
House and Senate legislation to shore up employer-provided
pensions. The final bill would affect 44 million Americans with
traditional pensions, many in older industries such as
airlines, automaking and steel.

The legislation covers a multitude of thorny funding issues
involving traditional pensions as well as some provisions
affecting retirement savings accounts known as 401 (k)s.

“I’m hopeful we will get it done this month and passed,”
said Montana Sen. Max Baucus, the ranking Democrat on the
Senate Finance Committee. “Everything’s very close.”

Grassley gave few details, but indicated the final version
of the bill was expected to limit companies’ use of credit
balances, a pension accounting benefit that can be used to make
plans look more healthy than they actually are. This would
affect many companies such as General Motors Corp., which
analysts say has a large credit balance.

“Everything we’ve been negotiating does that (restricts
credit balances) to some extent,” Grassley said.

Grassley said they had “not completely” wrapped up
agreement on a formula for deciding what pension plans are at
risk of default and therefore must put more money in.

Baucus said lawmakers have reached no decision on proposals
for special relief for struggling airlines and proposed rules
for conflict-free pension investment advice.

Bankrupt carriers Northwest Airlines and Delta Air Lines
have been pressing negotiators to include a provision that was
in the Senate version of the bill, giving them 20 years to pay
off pension underfunding.

But Baucus said the idea of making companies put more money
in pension plans because the companies had bad credit ratings
– a contentious provision that was in the Senate version of
the bill — was off the table. “That’s out,” Baucus said.

In the House of Representatives, Majority Leader John
Boehner, a Ohio Republican, said lawmakers were “very close” to
an overall agreement on the legislation but he declined to
suggest a deadline. Negotiators have missed several
self-imposed deadlines since beginning their work in March.