Retirement Plan Reform Stirs Again

Leaders in both parties have indicated they plan to move retirement plan reform bills this year. In the House, John Boehner (R-OH) will reintroduce the Republican bill he shepherded through that House last year. In the Senate, Tom Daschle (D-SD) will push a comprehensive Democratic bill (S. 9) that combines retirement reform with other Democratic economic issues. Given Republican control of the Senate, however, something closer to the House bill is much more likely to emerge from the relevant Senate committees. None of the provisions likely to survive in any bills would have a substantial effect on ESOPs. The bills would, however, give employees in 401(k) plans greater flexibility in moving investments out of company stock. One major sticking point between the House and Senate is likely to be a difference in investment advice provisions. The House favors providing fiduciary exemptions for companies that hire plan providers to give advice to participants; the Senate favors the exemption only for independent advisors.