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Agreement close on pension bill, lawmakers say

Posted on: Tuesday, 11 July 2006, 17:11 CDT

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.

Source: REUTERS

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