[Congressional Record Volume 142, Number 117 (Friday, August 2, 1996)]
[Senate]
[Pages S9607-S9609]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]
NONDISCRIMINATION RULES FOR GOVERNMENT PENSION PLANS LEGISLATION
Mr. HATCH. Mr. President, I rise today to introduce legislation with
Senators Conrad, Pressler, Pryor, Nickles, and Baucus that would make
permanent the current moratorium on the application of the pension
nondiscrimination rules to State and local government pension plans.
For nearly 20 years, State and local government pension plans have
been deemed to satisfy the complex nondiscrimination rules of the
Internal Revenue Code for qualified retirement plans until Treasury can
figure out how or if these rules are applicable to unique Government
pension plans. This bill simply puts an end to this stalled process and
dispels over 20 years of uncertainty for administrators of State and
local retirement plans. Let me summarize the evolution of this issue
and why this bill is being introduced today.
Mr. President, the Federal Government has a long-established policy
of encouraging tax deferred retirement savings. Most retirement plans
that benefit employees are employer sponsored tax deferred retirement
plans. Over the years, Congress has required that these plans meet
strict nondiscrimination standards designed to ensure that they do not
provide disproportionate benefits to business owners, officers, or
highly compensated individuals.
In response to the growing popularity of employer sponsored tax
deferred pension plans, Congress passed the Employee Retirement Income
Security Act [ERISA] in 1974 to enhance the rules governing pension
plans. However, during consideration of ERISA Congress recognized that
nondiscrimination rules for private pension plans were not readily
applicable to public pension plans because of the unique nature of
governmental employers. Former Representative Ullman, during Ways and
Means Committee consideration of ERISA, stated, ``The committee
exempted Government plans from the new higher requirements because
adequate information is not now available to permit a full
understanding of the impact these new requirements would have on
Governmental plans.'' Thus, Congress was not prepared to apply
nondiscrimination rules to public plans. After studying the issue, the
Internal Revenue Service on August 10, 1977, issued News Release IR-
1869, which stated that issues concerning discrimination under State
and local government retirement plans would not be raised until further
notice. Thus, an indefinite moratorium was placed on the application of
the new rules to government plans.
In 1986, Congress passed the Tax Reform Act of 1986, which made
further changes to pension laws and the general nondiscrimination
rules. On May 18, 1989, the Department of the Treasury, in proposed
regulations, lifted the 12-year public sector moratorium and required
that public sector plans comply with the new rules immediately.
However, further examination revealed, and Treasury and the IRS
recognized, that a separate set of rules was required for State and
local government plans because of their unique features. Consequently,
through final rules issued in September 1991, the Treasury
reestablished the moratorium on a temporary basis until January 1,
1993, and solicited comments for consideration. In addition, government
pension plans were deemed to satisfy the statutory nondiscrimination
requirements for years prior to 1993. Since then, the moratorium has
been extended three more times, the latest of which began this year and
is in effect until 1999.
Mr. President, here we are, in August 1996, 22 years since the
passage of ERISA and State and local government pension plans are still
living under the shadow of having to comply with the cumbersome,
costly, and complex nondiscrimination rules. Experience over the past
20 years has shown that the existing nondiscrimination rules have
limited utility in the public sector. Furthermore, the long delay in
action illustrates the seriousness of the problem and the doubtful
issuance of nondiscrimination regulations by the Department of the
Treasury.
Mr. President, last year during consideration of another extension of
the moratorium, a coalition of associations representative of State and
local governmental plans summarized their current position in a letter
to IRS Commissioner Margaret Richardson dated October 13, 1995.
In our discussions with Treasury over the past two years,
there have been no abuses or even significant concerns
identified that would warrant the imposition of such a
cumbersome thicket of federal rules on public plans that
already are the subject of State and local government
regulation.
Accordingly, while we always remain open to further
discussion, as our Ways and Means statement indicates the
experience of the past two years in working with Treasury to
develop a sensible and workable set of nondiscrimination
rules for governmental plans has convinced us that the task
ultimately is a futile one--portending tremendous cost,
complexity, and disruption of sovereign State operations in
the absence of any identifiable problem.
Mr. President, the sensible conclusion of this 20 year exercise is to
admit that the Treasury is not likely to issue regulations for State
and local pension plans and Congress should make the temporary
moratorium permanent.
Furthermore, there are examples to support this legislation. Relief
from the pension nondiscrimination rules is not a new concept.
Multiemployer plans are currently not covered by the nondiscrimination
rules under the theory that labor-management collective bargaining will
ensure nondiscriminatory treatment to rank-and-file workers. In
reality, Mr. President, State and local government pension plans face
an even higher level of scrutiny. State law generally requires publicly
elected legislators to amend the provisions of a public plan. Electoral
accountability to the voters and media scrutiny serve as protections
against abusive and discriminatory benefits.
Moreover, further precedent exists for Congress to grant relief from
the nondiscrimination rules. In 1986, the Congress established the
Thrift Savings Fund for Federal employees. As originally enacted, the
Fund was required to comply with the 401(k) nondiscrimination rules on
employee contributions and matching contributions to the fund. However,
in 1987, as part of a Continuing Appropriations Act for 1988, the
Congress passed a provision that made these nondiscrimination rules
inapplicable to the Federal Thrift Savings Fund. Thus, Congress has
reaffirmed the need to treat Governmental pension plans as unique.
Mr. President, this legislation is not sweeping nor does it grant any
new treatment to these plans. Because of moratorium, governmental plans
are currently treated as satisfying the nondiscrimination rules.
Lifting the moratorium would impose on governmental pension plans the
costly task of testing for discrimination when no significant abuses or
concerns exist. In fact, finally imposing these rules may require
benefits to be reduced for State and local government employees and
force costly modifications to these retirement plans. This legislation
coincides with the principle of allowing a State to enjoy the right to
determine the compensation of its employees.
Mr. President, with another expiration of the moratorium looming in
the future, I believe it is time to address this issue. I am under no
delusion that it will be resolved quickly. The complexities of these
rules and the uniqueness of governmental plans have brought us to where
we are today. I believe that as members better understand the history
of this issue they will agree with us that the appropriate step is to
end this uncertainty and make the temporary moratorium permanent.
[[Page S9608]]
Mr. President, I ask unanimous consent that the text of the bill be
printed following my remarks.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 2047
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. MODIFICATIONS TO NONDISCRIMINATION AND MINIMUM
PARTICIPATION RULES WITH RESPECT TO
GOVERNMENTAL PLANS.
(a) General Nondiscrimination and Participation Rules.--
(1) Nondiscrimination requirements.--Paragraph (5) of
section 401(a) of the Internal Revenue Code of 1986 (relating
to qualified pension, profit-sharing, and stock bonus plans)
is amended by adding at the end the following new
subparagraph:
``(F) Governmental plans.--Paragraphs (3) and (4) shall not
apply to a governmental plan (within the meaning of section
414(d)).''
(2) Additional participation requirements.--Subparagraph
(H) of section 401(a)(26) of such Code is amended to read as
follows:
``(H) Exception for governmental plans.--This paragraph
shall not apply to a governmental plan (within the meaning of
section 414(d)).''
(3) Minimum participation standards.--Paragraph (2) of
section 410(c) of such Code is amended to read as follows:
``(2) A plan described in paragraph (1) shall be treated as
meeting the requirements of this section for purposes of
section 401(a), except that in the case of a plan described
in subparagraph (B), (C), or (D) of paragraph (1), this
paragraph shall only apply if such plan meets the
requirements of section 401(a)(3) (as in effect on September
1, 1974).''
(b) Participation Standards for Qualified Cash or Deferred
Arrangements.--Paragraph (3) of section 401(k) of the
Internal Revenue Code of 1986 is amended by adding at the end
the following new subparagraph:
``(E)(i) The requirements of subparagraph (A)(i) and (C)
shall not apply to a governmental plan (within the meaning of
section 414(d)).
``(ii) The requirements of subsection (m)(2) (without
regard to subsection (a)(4)) shall apply to any matching
contribution of a governmental plan (as so defined).''
(c) Nondiscrimination Rules for Section 403(b) Plans.--
Paragraph (12) of section 403(b) of the Internal Revenue Code
of 1986 is amended by adding at the end the following new
subparagraph:
``(C) Governmental plans.--For purposes of paragraph
(1)(D), the requirements of subparagraph (A)(i) shall not
apply to a governmental plan (within the meaning of section
414(d)).''
(d) Effective Date.--
(1) In general.--The amendments made by this section shall
apply to taxable years beginning on or after the date of
enactment of this Act.
(2) Treatment for years beginning before date of
enactment.--A governmental plan (within the meaning of
section 414(d) of the Internal Revenue Code of 1986) shall be
treated as satisfying the requirements of sections 401(a)(3),
401(a)(4), 401(a)(26), 401(k), 401(m), 403 (b)(1)(D) and
(b)(12), and 410 of such Code for all taxable years beginning
before the date of enactment of this Act.
______
By Mr. MOYNIHAN (for himself, Mr. D'Amato, and Mr. Dodd):
S. 2048. A bill to amend section 552 of title 5, United States Code
(commonly referred to as the Freedom of Information Act), to provide
for disclosure of information relating to individuals who committed
Nazi war crimes, and for other purposes; to the Committee on the
Judiciary.
war crimes disclosure act
Mr. MOYNIHAN. Mr. President, today I am joined by Senators D'Amato
and Dodd in introducing the War Crime Disclosure Act. This legislation
is a companion measure to a bill pending in the House, H.R. 1281,
sponsored by Representative Maloney.
The measure is a simple one. It requires the disclosure of
information under the Freedom of Information Act regarding individuals
who participated in Nazi war crimes.
Ideally, such documents would be made available to the public without
further legislation and without having to go through the slow process
involved in getting information through the Freedom of Information Act
[FOIA]. Unfortunately this is not the case. Researchers seeking
information on Nazi war criminals are denied access to relevant
materials in the possession of the United States Government, even when
the disclosure of these documents no longer pose a threat to national
security--if indeed they ever did.
With the passing of time it becomes ever more important to document
Nazi war crimes, lest the enormity of those crimes be lost to history.
The greater access which this legislation will provide will add clarity
of this important effort. I applaud those researchers who continue to
pursue this important work.
I would also like to call to the attention of my colleagues the
excellent work of the Office of Special Investigations of the
Department of Justice. This office has a monumental task and I would
not wish to add to that burden or divert its officials from their
primary goal of pursuing Nazi war criminals. To that end, I would note
that this legislation does not apply to the Office of Special
Investigations, as it is not identified in paragraph (1)(B) of the bill
as a ``specified agency.'' I would also add that there is a provision
in the bill which specifically prohibits the disclosure of information
which would compromise the work of the Office of Special
Investigations.
Mr. President, I would like to thank Representative Maloney for her
original work on this subject in the House of Representatives. I would
also thank Senators D'Amato and Dodd for joining me in this effort here
in the Senate. Finally, I would be remiss if I did not pay special
tribute to A.M. Rosenthal, whose indefatigable efforts on this subject
are as admirable as they are effective.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 2048
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``War Crimes Disclosure Act''.
SEC. 2. REQUIREMENT FOR DISCLOSURE UNDER FOIA OF INFORMATION
RELATING TO INDIVIDUALS WHO COMMITTED NAZI WAR
CRIMES.
(a) In General.--Section 552 of title 5, United States
Code, is amended--
(1) by redesignating subsections (d), (e), and (f) as
subsections (e), (f), and (g), respectively; and
(2) by inserting after subsection (c) the following new
subsection:
``(d)(1)(A) Notwithstanding subsection (b), this section
shall apply to any matter in the possession of a specified
agency, that relates to any individual as to whom there
exists reasonable grounds to believe that such individual,
during the period beginning on March 23, 1933, and ending on
May 8, 1945, under the direction of or in association with--
``(i) the Nazi Government of Germany,
``(ii) any government in any area occupied by the military
forces of the Nazi Government of Germany,
``(iii) any government established with the assistance or
cooperation of the Nazi government of Germany, or
``(iv) any government that was an ally of the Nazi
government of Germany,
ordered, incited, assisted or otherwise participated in the
persecution of any person because of race, religion, national
origin, or political opinion.
``(B) For purposes of subparagraph (a), the term `specified
agency' means the following entities, any predecessors of
such an entity, and any component of such an entity (or of
such a predecessor):
``(i) The Central Intelligence Agency.
``(ii) The Department of Defense.
``(iii) The National Security Agency.
``(iv) The National Security Council.
``(v) The Department of State.
``(vi) The Federal Bureau of Investigation.
``(vii) The United States Information Agency.
``(2)(A) Except as provided in subparagraph (B), Paragraph
(1) shall not apply to the disclosure of any matter when
there is clear and convincing evidence that such disclosure
would--
``(i) reasonably be expected to constitute an unwarranted
invasion of personal privacy;
``(ii) pose a current threat to military defense,
intelligence operations, or the conduct of foreign relations
of the United States;
``(iii) reveal an intelligence agent whose identity
currently requires protection;
``(iv) compromise an understanding of confidentiality
currently requiring protection between an agent of the
Government and a cooperating individual or a foreign
government;
``(v) constitute a substantial risk of physical harm to a
living person who provided confidential information to the
United States; or
``(vi) compromise an enforcement investigation,inquiry, or
prosecution by the Office of Special Investigations of the
Department of Justice.
``(B) Subparagraph (A) shall only apply to records,
information, or other relevant matter which is--
``(i) properly classified; and
``(ii) the protection of which outweighs the public
interest in disclosure.
``(3) Any reasonably segregable portion of a matter
referred to in paragraph (2) shall be provided, after
deletion of all portions of the matter that are referred to
in such subparagraph, to any person requesting the matter
[[Page S9609]]
under this section if the reasonably segregable portion of
the matter would otherwise be required to be disclosed under
this section.
``(4) In the case of a request under this section for any
matter required to be disclosed under this subsection, if the
agency receiving such request is unable to locate the records
so requested, such agency shall promptly supply, to the
person making such a request, a description of the steps
which were taken by such agency to search the indices and
other locator systems of the agency to determine whether such
records are in the possession or control of the agency.''.
(b) Inapplicability of National Security Act of 1947
Exemption.--Section 701 of the National Security Act of 1947
(50 U.S.C. 431) is amended--
(1) by redesignating subsections (e) and (f) as subsections
(f) and (g), respectively; and
(2) by inserting after subsection (d) the following new
subsection:
``(e) Subsection (a) shall not apply to any operational
file, or any portion of any operational file, described under
section 552(d) of title 5, United States Code (Freedom of
Information Act).''.
SEC. 3. EFFECTIVE DATE.
The amendments made by this Act shall apply to requests
made after the expiration of the 180-day period beginning on
the date of the enactment of this Act.
____________________