PBGC Increase, New Savings Accounts in President’s 2009 Budget
The proposal, included in the president’s fiscal 2009 federal budget, is aimed at helping the agency close a $13.1 billion deficit in its single-employer program, according to the budget. The proposal was originally advanced by Bush in 2005 as part of his comprehensive pension reform plan but was not included in the Pension Protection Act of 2006; it was also included in the fiscal 2008 budget but failed amid opposition from pension plan industry lobbyists.
The 2009 budget also includes a series of proposals previously presented by Bush that would simplify the rules applied to a variety of defined-contribution plans and other savings plans. Among other things, the proposals would consolidate 401(k), SIMPLE 401(k), SARSEP (salary reduction simplified employee pension), thrift, 403(b) and governmental 457(b) plans into a new “employer retirement savings account.”
The account would be subject to the same rules that generally apply to 401(k) plans. The retirement plan proposals, included in previous presidential budgets, have also failed to go anywhere because key lawmakers were concerned the accounts could undermine the current employer plan system.
“I really haven’t seen anything new in here [the president’s 2009 budget], and we don’t think these proposals will see any significant action this year,” said Ted Godbout, a spokesman for the ERISA Industry Committee in Washington.
The president’s budget also proposed a 6 percent increase in funding for the Department of Labor’s Employee Benefits Security Administration, to $147.9 million. The increase is intended to let EBSA “increase the quality, timeliness and transparency of pension information disclosed to the public and employees, as well as to maintain the strong enforcement record of recent years,” according to a Labor Department press release.