The dangerously low national savings rate, combined with rampant employer underfunding of pension plans and Social Security’s solvency problems, have spurred congressional leadership to undertake the ambitious task of remodeling American retirement before session’s end.
Addressing members of the American Banking Association, Boehner offered a litany of retirement-policy proposals he said will be included in Thomas’s bill. Higher caps on 401(k) contributions, a simplified take on lifetime savings accounts and automatic enrollment in defined-contribution retirement plans are all on the table, Boehner said.
Although “there is some risk” in easing the restrictions on pension-fund managers’ ability to give investment advice to employees, because of potential conflicts of interest, Boehner said he will be including it in his bill. Stricter disclosure of retirement-adviser fees and commissions will also be mandated, but only under certain conditions. “Nothing in this bill requires them to print in billboard-size letters exactly what those fees are,” Boehner said.
Social Security changes will also factor in to the broad retirement bill, Boehner said, expanding on last week’s personal-accounts plan from Reps. Jim McCrery (R-La.), Paul RyanPaul RyanRyan has little margin for error in Speaker vote Chaffetz says he'll vote for Trump The Trail 2016: Comeback in the works? MORE (R-Wis.) and Clay Shaw (R-Fla.), which did not address the system’s future solvency. “Thomas and I have built this defined-benefit bill together,” Boehner said before giving a timing deadline: “By Christmas Eve, we’ll definitely get a retirement bill signed into law.”
Boehner also assured the bankers that budget reconciliation instructions to find $12.6 billion in savings over the next five years would not slow his progress. His pension bill, which will be marked up and almost certainly passed through his committee today, follows the White House recommendation to increase companies’ monthly pension premium fees from $19 per enrollee to $30. Employer interest groups continue to maintain that such an increase would be a financial blow that could harm business growth.
Boehner has consulted with Democrats and labor unions to try to integrate their concerns and build consensus in favor of the bill. Even so, Rep. George Miller (D-Calif.), the top Democrat on Education and the Workforce, continued to pursue possible changes to the bill until late yesterday. Miller and others plan to introduce a number of amendments at the markup.
Chief among Miller’s priorities: placing more restrictions on companies’ ability to default on their pensions, shifting the obligations to the Pension Benefit Guaranty Corp. and tying executive pensions to rank-and-file workers’, making it more difficult for the former to be paid while the latter obligation is in default.
As for Social Security, Boehner struck a wary note despite the House GOP leadership’s support for the McCrery-Ryan-Shaw bill. “When it comes to the political side of this, it’s nearly impossible to get anything to happen,” Boehner said. “People just aren’t engaged. … The more the president talks about it, the worse the numbers get.”