Statement of Administration Policy: S. 685 - Employee Pension Protection Act of 1990

(Senate)
(Metzenbaum (D) OH and 19 others)

The Administration strongly opposes S. 685, as reported by the Senate Labor and Human Resources Committee. The Administration believes that current law correctly balances incentives for voluntary sponsorship of private pensions with protections for workers and retirees. So 685 would Create disincentives for sound plan funding and for the creation and maintenance of certain types of voluntary private pension plans.

The bill would have the effect of reducing the amount of pension plan assets reverting, to employers upon plan termination. S. 685 would result in a Federal revenue loss of $200 million per year, because such reversions are subject to the corporate income tax and a 15 percent excise tax.