<nobr>Jun 8, 2005</nobr>

ERIC: Smith Conrad Letter RE: Defined Contribution Legislation

ERIC welcomed the efforts of Senators Gordon Smith (R-OR) and Kent Conrad (D-ND) to craft bipartisan defined contribution legislation. The senators introduced the Retirement Savings and Security Act of 2005 on June 9.

The bill addresses automatic enrollment, the Saver’s Credit, and annuities. The ERIC letter indicates that, once ERIC’s members have had an opportunity to review how the proposal will impact employer plans, ERIC will present congressional staff with more information on its position on the bill’s provisions. Several ERIC members have expressed initial concerns that the bill appears to create an environment that favors defined contribution plans over defined benefit plans, particularly with regard to tax-favored treatment of annuities connected to defined contribution plans. ERIC members are urged to carefully review the bill.

At a press conference on the bill, Senator Smith indicated he does not expect the legislation to become part of the social security debate, despite suggestions from both Senate Finance Committee Chairman Charles Grassley and House Ways and Means Chairman Bill Thomas. He adds that they support advancing a broad retirement security initiative which includes proposals for reforming both social security and employer-sponsored benefit plans

Text Files:

ERIC Letter to Smith Conrad


Websites:

Retirement Savings and Security Act of 2005 (Smith-Conrad Bill)

Summary of Smith-Conrad Bill

ERIC Summary of Smith-Conrad Bill

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