Vote No to the Sanders Amendment
September 4, 2003
To Members of the United States House of Representatives:
When the House considers H.R. 2989, the Transportation, Treasury and Independent Agencies Authorization Appropriations Act for Fiscal Year 2004, later this week, the U.S. Chamber urges the House to reject any amendment that would prohibit the Internal Revenue Service from using funds to regulate cash balance retirement plans.
Much of the opposition to these plans is based on an assumption that cash balance plans, or conversions to cash balance plans, are inherently age discriminatory and comes on the heels of a highly controversial court decision. However, a federal court, in that same district, has previously ruled that cash balance plans do not violate age discrimination laws. In addition, no federal agency with jurisdiction over pension and discrimination issues – the Department of Treasury, Internal Revenue Service, Department of Labor, and the Equal Employment Opportunity Commission – has determined that cash balance plans, or conversions to them, violate federal age discrimination, ERISA, or tax laws. On the contrary, in December 2002, the IRS issued proposed regulations clarifying that cash balance plans are not inherently age discriminatory under ERISA. After receiving public comments supporting this view, the IRS has indicated that it will issue final regulations to this effect by the end of the year.
This area of the law is extremely complex, and has involved countless hours of study and analysis by experts from each federal agency. Prohibiting the IRS from continuing its work, as such an amendment would do, would cause great harm to the employer-sponsored pension system, leaving them in a state of suspended uncertainty. Such an outcome would not be in the best interests of employees or employers who offer retirement plans.
Accordingly, the U.S. Chamber urges House members to vote NO on any amendment to H.R. 2989 – the FY 04 Transportation, Treasury and Independent Agencies Authorization Appropriation Act – that would hinder the IRS from regulating cash balance plans.
R. Bruce Josten
Executive Vice President
U.S. Chamber of Commerce