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Labor and Workforce Development Committee
National Conference of State Legislatures (NCSL) March 14, 2006 The Honorable John A. Boehner Dear Mr. Majority Leader: On behalf of the national organizations listed above—representing state and local governments, public employee unions, public retirement systems, and over 20 million public employees, retirees, and beneficiaries—we are writing to express our support for a number of public pension provisions contained in the House-passed Pension Protection Act of 2005 (H.R. 2830) and the Senate-passed Pension Security and Transparency Act (S. 1783). We request your assistance in retaining and/or making necessary revisions to the following provisions in the final conference agreement, most of which have a negligible revenue effect, and all of which are of great importance to public employees and State and local governments throughout the country:
These many valuable provisions would assist our public workers in saving for their retirement and remaining financially secure in their retirement years, and would provide certainty to employees and employers with regard to plan provisions and designs. Provisions that Require Further Study We also wish to highlight that there is significant concern within many of our organizations regarding unforeseen consequences resulting from the extension of new 401(k) plans to State and local governments, particularly regarding the preemption of State laws along with these programs. The State and local government 401(k) proposal alone was scored by the Joint Committee on Taxation as costing more than $2.5 billion over 10 years. There are numerous provisions in the two bills, many revenue negligible, that are far more important to our organizations and the public employees and retirees, State and local governments, and retirement systems we represent. Given the revenue implications and the concerns over possible unintended outcomes, Congress may wish to consider a study or hearing on the need for additional retirement vehicles in the public sector before acting on these proposals. This would allow consideration of broader policies on how best to increase overall retirement savings. As you know, public sector employees already have the ability to participate in deferred compensation plans, and many are concerned that the addition of 401(k) plans may only supplant rather than supplement current savings and could even result in additional cost and complexity for State and local governments as well as for plan participants. We appreciate your past support for public retirement issues and hope you will similarly work to see the many important provisions outlined above are appropriately addressed in any final conference agreement on House and Senate pension legislation. We look forward to working with you and your staff as legislation is considered. If you have any questions or need additional information, please feel free to contact our legislative representatives: Chris Allen, NAST, (202) 624-8595 CC: Stacey Dion
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