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JULY
13, 1999 1:14 PM
FOR IMMEDIATE RELEASE
CONTACT: Pension Rights Center
Karen Friedman at 202-296-3776
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| Experts
Call Portman-Cardin Pension Bill "Retirement Reduction Act." |
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WASHINGTON
- July 13 - The Portman-Cardin "Comprehensive Retirement Security and Pension
Reform Act" (HR 1102), included in the tax package to be considered by the House
Ways and Means and Education and the Workforce Committees on Wednesday, July 14,
1999, will "roll back critical protections for low and average wage earners, while
providing costly and unneeded tax breaks for company executives and other highly-paid
employees," according to the Pension Rights Center, a consumer rights organization.
While sponsors and supporters of the legislation claim that the Portman-Cardin
legislation would help Americans improve old-age income, experts claim that it
will reduce retirement security. Karen Ferguson, the Center's Director, notes
that "by favoring the wealthy at the expense of ordinary workers, this legislation
represents irresponsible retirement policy."
The legislation will:
* Provide increased retirement tax breaks for top earners who don't need them.
* Take away important pension protections designed to protect rank-and-file workers.
* Eliminate vital consumer information that workers now get about their plan investments.
A wide range of prominent tax and pension experts have expressed deep concern
about the legislation. Here is what some of them have to say about the Portman-Cardin
provisions:
"The most significant provisions of Portman-Cardin will shift tax benefits to
higher-income taxpayers." "Almost every provision of Portman-Cardin will benefit
those who already save sufficiently for retirement, and likely will lead to the
reduction of benefits for many of the rest."
Dianne Bennett
Pension Lawyer
President, Hodgson, Russ, Andrews, Woods & Goodyear, LLP
716-856-4000 Phone
"It would be ironic and deeply unfortunate if this well-intentioned but flawed
legislation is enacted, for it may well be remembered as a retirement reduction
act."
"HR 1102 includes a virtual smorgasbord of provisions that increase an employer's
incentive to switch from a traditional employer-pay plan to a 401(k) plan, and
lower the employer's incentive to provide benefits for moderate and lower-income
employees."
Norman Stein
Douglas Arant Professor of Law
University of Alabama School of Law
205-348-1136
"...this legislation will do far more harm than good."
"benefits for the highest paid could be maintained at the current level, while
contributions for all other employees were reduced by nearly 30%."
"Unfortunately, I believe the bill will endanger the level of protection now enjoyed
by rank and file workers while substantially increasing the tax preference for
the relatively well off. We can do better."
Daniel Halperin
Stanley S. Surrey Professor of Law
Harvard Law School
617-496-5505
"The Portman-Cardin proposal does something to enhance one proven force that enhances
pensions for low and moderate income workers -- multiemployer plans, but severely
reduces the strength of the other two force -- anti-discrimination rules and business-owners=
impulses to cover their lower paid workers."
"Portman-Cardin diminishes the good effects of anti-discrimination rules and helps
the top paid small and moderate employers get tax breaks while not extending pensions
to their workers."
Teresa Ghilarducci
Associate Professor of Economics
University of Notre Dame
219-631-7581
"Where the highly paid are satisfied with current benefit levels, an increase
in considered compensation may even provide an opportunity to reduce benefit levels
for most employees without affecting benefits for the highly paid."
Donald C. Lubick
Assistant Secretary for Tax Policy
US Department of the Treasury
Contact US Treasury Department
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