Coalition for Retirement Security (CRS) Letter to President Clinton 
Date: Tue, 31 Oct 2000 08:55:06 -0500 

The attached letter was sent out at 1:30 PM yesterday to President Bill Clinton.

We hope you will disseminate this letter as best you can. We continue to receive additional input on the dangerous stealth actions and language inherent in the tax/pension bill.

A case in point:

Section 402 of the Tax Payer Relief Act of 2000 would jeopardize participants by potentially exposing them to prohibited transactions and other misconduct by permitting certain employers (457 sponsors, such as tax exempts hospitals) to deprive participant from protections of Title I of ERISA simply by "deeming" accounts holding participant assets to be IRAs, (except sections 403(c) 404 and 405).

This provision was not present in any prior draft and thus is beyond the scope of legislation that has been considered by either legislative body. This provision has not been subject to hearing or debate. The provision would appear to have a number of negative consequences:

* It would remove the prohibited transaction protections in Title I from a potentially large pool of assets.

* Plan sponsors could engage self-dealing and other abusive transactions without the protection of these provisions.

* This could set a dangerous precedent for others who would want to claim the same exceptions.

* Confusion could reign in the regulated community because state law requirements inconsistent with ERISA would not be preempted by section 514 of ERISA.

Just another good reason vetoing this bill is so important.

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October 29, 2000

The Honorable William Jefferson Clinton President 
THE WHITE HOUSE Washington, DC

Dear President Clinton:

I am writing on behalf of the Coalition for Retirement Security to urge you to veto the Taxpayer Relief Act of 2000. More than one-third of this legislation, nearly 100 pages, consists of pension and savings provisions that will undercut the retirement security of American workers. The Coalition is a nonprofit, all volunteer, grassroots umbrella organization representing the interests of 1,153,000 employees and retirees on pension and retiree health insurance issues.

The pension provisions of the bill were largely drafted by and for business and financial interests, which have spent several years and hundreds of thousands of dollars lobbying for their enactment. The principal purpose of these measures is to increase pension benefits for corporate executives, and management, marketing, and administrative fees for mutual funds, insurance companies and consulting firms. Not only will it NOT improve pension benefits for rank and file workers, this legislation will almost certainly lead to an overall decline in such benefits.

With the exception of two provisions added by the Conference Committee (after the House of Representatives and Senate Finance Committee voted on the bill), and one sought by the construction trades unions, there appear to be no provisions in the bill that were included specifically to increase pension protections or benefits for typical rank and file private sector workers. In fact, as Treasury Secretary Summers has pointed out, the bill’s proposed increase in 401(k) limits could hurt those workers by making it more likely that their companies will freeze or terminate traditional pension plans that provide benefits for workers at all income levels in favor of savings plans, which only help those who can afford to contribute to these plans. As for workers whose employers continue traditional plans, the increase in the covered compensation limit could have the effect of reducing the dollar amount of the pension benefits they earn in future years.

We also strongly oppose the provisions in the bill that roll back or take away existing worker protections. These include provisions to eliminate early retirement-type subsidies based upon the number of years before a participant attains retirement age (Section 435(b)(2)). We oppose any provision in the bill that permits contravention of the ERISA protection of accrued benefits (Section 481(a)(2) and (b)(1)(A)). We strongly oppose provisions that remove certain “top-heavy" rules which would then permit a 401k) plan which benefited only the business owner.

The bill also eliminates nondiscrimination and coverage rules that are meant to ensure a “trickle down” of minimal benefits to some lower-paid workers, so that tax-subsidized retirement plans are not solely tax shelters for company owners and officers. The bill also undermines important reporting and disclosure provisions, notably those relating to automatic distribution of the Summary Annual Report, filing of financial information by companies with 25 or fewer employees, and notification to certain retirees that their pensions will be suspended if they return to work. We recognize that modifications in the bill were made in response to concerns expressed by our Coalition, its members, and others, to the provisions relating to cash balance conversions, but the final measure merely provides for inadequate (and undetermined) disclosure, and does not address the urgent need to put an end to this unconscionable pension practice. There is a critical need for a great many revisions in the nation’s private retirement programs, as well as incentives to encourage expansion of its coverage to the more than one-half employees without pension or savings plans. But the Taxpayer Relief Act of 2000, which would cost taxpayers nearly $64 billion over ten years, would hurt, not help American workers, and should be vetoed.

Sincerely yours,

Chair-Paul R. Edwards
(413) 706-1710
pre-crs@map.com

Association of BellTel Retirees, Inc.
www.belltelretirees.org
C. William Jones, President
(410) 770-9485

Association of Former Pan Am Employees (AFPAE)
www.panam.com/afpae.htm
Richard Brooks, President afpaeinc@aol.com,
(516) 763-0357

Association of U S WEST Retirees (AUSWR)
Jim Norby, Chair, anorbz@aol.com
Nelson Phelps, Executive Director, nbphelps@world.net.att
www.uswestretiree.org

AT&T Concerned Employees Council On Retirement Protection (ACE CORP)
att.nac.net

Bell Atlantic Employees Coalition for Retirement
Security (BAECRS)
Janice Winston, janicewinston@yahoo.com
www.bapensions.org

GE Retirees' Justice Fund
Helen Quirini, Co-Chair, HQuirini@aol.com
Phone (518) 355-2186
Kevin Mahar, Co-Chair, KMahar5063@aol.com
(781) 592-0884

IBM Employee Benefits Action Coalition (IEBAC)
www.cashpensions.org
Janet Krueger, Spokesperson, jkrueger@andrewscg.com
(507)-527-8777, ext. 110

Johns Manville Retirees
John Leasher, President, johnleasher@compuserve.com
(303) 697-6258

National Association of Retired Greyhound Employees (NARGE)
Serge Vasquez, President, sergevas@gte.net
(541) 756-4776

National Association of Prudential Retirees, Inc.
Carl Rose, President, NAPRI@aol.com
(888) 730-6090

NY Transit Police-Variable Supplement Fund-Legal Funds Inc.
Ed Ranieri, President, er3958@MSN.com
(718) 966-6143

Southern New England Telephone Retirees Association, Inc, (SRA)
Hugh A. Baird, habaird@snet.net
Bill Murty, Director of Government Relations
BDMurty@aol.com
(860) 675-0560