A bill awaiting Senate approval before going to the White House would help small-business owners establish retirement plans for their employees and allow workers age 50 and older to set aside retirement funds immediately.
Although the San Diego Regional Chamber of Commerce has not yet taken a position on the bill, the U.S. Chamber of Commerce is the leading lobbyist group in support of the measure.
The Comprehensive Retirement Security and Pension Reform Act, HR-1102, breezed through the House of Representatives by a 401-20 vote Sept. 19.
Currently, it awaits the proper packaging with another bill in the Senate before it is approved and sent to President Bill Clinton’s desk, said Chris Myers, director of congressional and public affairs for the U.S. Chamber of Commerce.
Myers believes the bill’s overwhelming approval by the House will ensure an easy passage through the Senate.
The White House, however, is another matter.
– Proposal Reduces Costs, Paperwork
The bill, in its current state, would “greatly reduce” the regulatory costs of establishing employee retirement plans and the amount of administrative paperwork small business owners must submit to the federal government, Myers said.
The second provision of the bill allows wage earners 50 and older to “catch-up” on retirement savings, said Bob Burson, an accountant with the Escondido-based firm of Grice, Lund & Tarkington LLP.
Employees in that age group can begin contributing $5,000 immediately to their retirement accounts beginning 2001 without dealing with phase-in provisions such as those facing younger workers, Burson said.
In addition, deferrals to 401(k)’s for participants 50 and older can be increased to $20,000 from the $15,000 limit.
“I think it’s a gradual shift to encourage retirement savings and it’s somewhat of a shift away from policy that has prevailed in the past where there was an obligation (by the federal government) to cover rank-and-file people,” Burson said.
In Washington, lobbyist Myers believes the Senate will approve the measure before Congress adjourns Oct. 14.
Should Clinton sign the bill, it would become one of the few laws passed during the election period this year.
– Presidential Office Reports Opposition
However, the president’s Office of Management and Budget released a report in July stating the administration was “strongly opposed” to the legislation as proposed.
The executive branch argued the bill did not go far enough to address “the fundamental problem” that “75 million Americans” are not covered by any employer-sponsored retirement plan.
The document went on to say that any retirement fund legislation should be in a “fiscal framework,” including prescription drug coverage and school improvements.
“At this point, we’re not really suggesting how Congress packages the bill,” Myers said. “Instead, what we’ve asked Congress to do is make sure this bill gets done.”
