Outlook

January 17, 2007

Congress returns this month to face a shortened year due to the Presidential elections. In response to those pressures, it is expected to move quickly on broad and populist issues such as an economic stimulus package. It is unlikely that such a bill will provide opportunities for retirement security-related measures. However, the conference report on the Farm bill, which contains the Roth 457 provision, is expected to become law. Assuming the Roth provision survives the conference, an effective date will have to be resolved. Currently, the stated effective date of the Roth provision is Jan. 1, 2008.

Expect more regulatory action on fee disclosure from both the DOL and the SEC. As a result, legislative action on new requirements for fee disclosure on retirement plans may be slowed. Even so, Chairman Miller is expected to try to move a fee disclosure bill through the House by the summer. Chairman Rangel (D-NY), while taking a more “wait and see” attitude, has repeatedly said that work on fee disclosure will be done in a bi-partisan manner with Ranking Member Jim McCrery (R-LA). In the meantime, the Senate may decide to hold hearings on the topic later this year.

The 2008 legislative year will be an opportunity to gain momentum for the Tax Equity for Health Plan Beneficiaries Act, H.R. 1820 and the Tax Equity for Domestic Partner and Health Plan Beneficiaries Act, S. 1556. Both bills contain a provision that would reverse the Treasury's Revenue Ruling on Health Reimbursement Arrangements (HRA), which stated that whether taxable or not, reimbursements from HRAs may no longer be made to non-spouse or non-dependent beneficiaries. The coalition supporting these bills, of which ICMA-RC is a member, intends to push for more co-sponsors and hearings in 2008. For more information read ICMA-RC’s Call-to-Action.

ICMA-RC will continue to monitor all legislative and regulatory developments that impact governmental retirement and retiree health plans. Visit the Legislative Report for more legislative and regulatory information.