u.s. chamber of commerce health and retirement priorities

U.S. Chamber of Commerce Health and Retirement Priorities

for the 112th Congress

The Year in Review and the Year Ahead

LABOR, IMMIGRATION & EMPLOYEE BENEFITS DIVISION

U.S. CHAMBER OF COMMERCE

Th e U.S. Chamber of Commerce is the world’s largest business federation representing the interests of more than 3 million businesses of all sizes, sectors, and regions, as well as state and local chambers and industry associations.

Copyright © 2011 by the United States Chamber of Commerce. All rights reserved. No part of this publication may be reproduced or transmitted in any form—print, electronic, or otherwise—without the express written permission of the publisher.

U.S. Chamber of Commerce Health and Retirement Priorities

for the 112th Congress



Dear Reader:

Th e U.S. Chamber of Commerce is a well-regarded thought and advocacy leader

for national and global employee benefi ts issues. Our unmatched grassroots

clout enables us to orchestrate business involvement to win critical regulatory

and legislative initiatives and advocate for our members’ most pressing business

issues. Th is brochure presents some of our recent accomplishments, as well as key

priorities, in our proactive health care and pension agenda.

Th e Chamber is committed to promoting cost-eff ective, accessible, and quality

employer-sponsored health care through market-based approaches that preserve

fl exibility and reward innovation. We are also determined to protect the

retirement security of America’s workforce and preserve the ability of employers

to provide fl exible and comprehensive compensation to employees.

It is my pleasure to manage the Chamber’s dynamic employee benefi ts portfolio

and, if you have not already done so, I encourage you to join the U.S. Chamber

of Commerce and help our eff orts in shaping the organization’s agenda in these

critical areas.

Randel K. Johnson

Senior Vice President

Labor, Immigration & Employee Benefi ts

The Year in Review and the Year Ahead | 3

HEALTH CARE PRIORITIES

Health Care Reform

Although the U.S. Chamber of Commerce is committed to revamping the nation’s health care system to lower costs, improve quality and access, and build a more value-driven system, the Patient Protection and Affordable Care Act (PPACA) does not accomplish these goals. The Chamber opposes forcing employers to fund, or individuals to participate in, a flawed and unaffordable system. Rather than spend years debating how to reinvent the health care system, Congress should immediately take concrete steps, building on the strengths of the current market-based and employer-sponsored system, to help more Americans get better, more affordable health care coverage. If PPACA cannot be repealed, key pieces of it must be stricken and replaced with market-driven, consumer-based reforms that bolster the health care system and the economy.

Major pieces of PPACA in some cases must be repealed or pared down. The Chamber is tackling:

• Th e employer mandate and associated penalties.

• Th e $500 billion in new taxes on small businesses, medical industries, and more.

• Th e vast new bureaucracy of government programs and agencies, such as the Community Living Assistance Services and Supports (CLASS) Act’s long-term care takeover.

• Th e restrictive grandfathering rules that essentially force all employers to meet all of the new coverage rules.

• Th e new insurance rules that eff ectively outlaw limited benefi t plans and hamper the ability of employers to signifi cantly vary plan design.

Medical Liability Reform

The unpredictable medical tort system burdens our health care system by driving doctors away from high-risk specialties and raising malpractice insurance costs—leading to a lack of access to proper care and raising prices for consumers and employers. The Chamber supports capping the amount of noneconomic damages that a jury can award in medical malpractice cases and is interested in proposals to remove medical malpractice cases from the tort system. As an alternative, medical cases could be tried in special administrative health courts, like bankruptcy courts and similar types of other administrative courts. Other innovative approaches include offering joint and several liability, capping trial attorney fees, prescreening cases by expert panels, and protecting providers that follow best practices.

Amy Turner, senior advisor at the Department of Labor, addresses the Chamber’s Employee Benefi ts Committee on implementing health care reform.

4 | Health and Retirement Priorities

Health Information Technology

The Chamber supports bipartisan legislation encouraging widespread adoption of health information technology (HIT), which has the potential to lower costs, improve quality, reduce medical errors, and build consistent and continuous care. HIT initiatives should be bolstered by allowing larger providers to help smaller providers obtain HIT products and training. Also, grant programs should take into account the needs of providers with multiple campuses that would experience increased costs.

New Pooling Options for Small Businesses

The Chamber is committed to leveling the playing field for small businesses that voluntarily offer employee benefits. Four small business owners testified on behalf of the Chamber before each of the four House committees with jurisdiction over health care issues.

• Scott Womack, owner and president of Womack Restaurants, a 12-unit IHOP fran-chisee in Indiana and Ohio, testifi ed before the House Committee on Ways and Means.

• Brett Parker, vice chairman and chief fi nancial offi cer of Bowlmor Lanes, headquartered in New York City, testifi ed before the House Committee on Education and the Workforce’s Subcommittee on Health, Employment, Labor and Pensions.

• Bill Feinberg, president of Allied Kitchen and Bath, Inc. in Fort Lauderdale, Florida, testifi ed before the House Committee on Small Business.

• Phil Kennedy, owner and president of Comanche Home Center in Lawton, Oklahoma, testifi ed before the House Committee on Energy and Commerce’s Subcommittee on Health.

Each of these businessmen highlighted the importance of new pooling options to ease the challenges small businesses face in providing quality benefits to employees.

Some of the ways that the Chamber will continue to advocate for changes in current laws include working to:

• Allow small businesses to purchase benefi ts with the same tax advantages that large businesses have.

• Let small businesses pool together to leverage purchasing power to purchase health plans across state lines.

• Make certain that small businesses are not burdened with costly state health care mandates.

• Permit the owners of small businesses to participate in their companies’ benefi ts plan.


Ken Serafi n, workforce policy counsel, House Committee on Education & the Workforce, discusses the 2011 congressional agenda at the Employee Benefi ts Committee meeting at the Chamber.


Workplace Wellness and Disease Management

Wellness programs help control costs by managing existing cases, and by preventing millions of new cases, of chronic diseases. The Chamber supports raising awareness of the positive effects of workplace wellness and giving tax-favored status to programs aimed at keeping employees healthy.

The Chamber works to promote these policies through its leadership in the U.S. Workplace Wellness Alliance by:

• Targeting tax credits for employer-sponsored workplace wellness programs for employees.

• Raising awareness through educational eff orts, such as National Workplace Wellness Week.

• Increasing employee engagement through personal responsibility and premium variation.

Comparative Effectiveness

The Chamber supports research on the compara-tive effectiveness of various procedures, devices, and life sciences products to develop best practices and guidelines for providers. Financing this research should be a joint venture among all payers and should not be funded through premium taxes on American workers.

Medicare Issues

Medicare reform is integral to preserving the system’s long-term viability and should focus on realigning Medicare spending. Medicare’s physician payments are set by a sustainable growth rate (SGR) formula that needs comprehensive reform. The program needs a new reimbursement model that rewards quality and efficiency. As Medicare adopts such a system, the private sector will too. The Chamber will advocate for certain, and against other, proposed changes to Medicare. To improve the program, we must:

• Restore and expand the Medicare Advantage program.

• Support greater emphasis on quality-focused, performance-driven benchmarks in redesigning physician Medicare reimbursements.

• Advocate for comprehensive SGR reform, ending the annual ritual of threatened physician paycuts, inaccurate budget assumptions, and Medicare cost uncertainties—and tie SGR reform to quality and transparency improvements.

Retiree Health

Some legislators are attempting to force employers to provide, or maintain, expensive retiree health plans. The Chamber supports preserving employer flexibility in creating, offering, and augmenting retiree health plans. Rather than tying employers to unaffordable plans, Congress should promote


Brett Parker, of Bowlmor Lanes, New York City, testifi es on behalf of the U.S. Chamber. The hearing, held by the House Health, Labor and Pensions Subcommittee was on the rising costs of employer-provided health care.


the creation of new vehicles and expand options to encourage more employers to offer retiree health and more workers to enroll in plans.

ERISA Preemption

Employers depend on the Employee Retirement Income Security Act (ERISA) to ensure that they can offer plans nationwide, providing fairness to all employees regardless of where they live, work, or receive medical care.

The Chamber will continue to work to protect the foundation of the employee sponsored health care system by:

• Urging Congress not to dismantle the ERISA framework.

• Opposing state and local eff orts to circumvent ERISA preemption and interfere with self-insured plans.

• Co-chairing advocacy eff orts in the National Coalition on Benefi ts, a broad coalition of groups dedicated to protecting ERISA.

Consumer-Directed Health Accounts

Health care consumerism depends on placing health care spending decisions back into the hands of individuals. To do this, employers and workers need health plan options that meet their needs and give them personal ownership of their health care dollars.

The Chamber will advocate to:

• Repeal new caps and restrictions on the use of consumer-directed accounts for over-the-counter (OTC) medicines.

• Promote legislation allowing money in Flexible Spending Accounts (FSAs) to be “rolled over,” thus eliminating the use-it-or-lose-it rule. (Th e Chamber believes that the use-it-or-lose-it rule encourages unnecessary spending and that FSAs


Phil Kennedy, president of Comanche Lumber Co, Inc., in Lawton, Oklahoma, testifi es on behalf of the U.S. Chamber at the House Committee on Energy and Commerce’s Subcommittee on Health hearing titled “True Cost of PPACA: Effects on the Budget and Jobs.”


should, instead, promote thoughtful spending and saving for future health care expenses.)

• Support changes to Health Savings Accounts (HSAs) to make them more fl exible and appealing to consumers and plan sponsors.

• Support transparency eff orts that give employees more information about the quality and costs of health care so that they can be smart shoppers.

Patient-Centered Medical Home

The Chamber supports the Patient-Centered Medical Home (PCMH), which provides patients with coordinated care through a personal and ongoing relationship with a health care provider. The health care payment and reimbursement system should evolve to follow the PCMH model of care in order to improve quality and efficiency in medical care, particularly for patients with chronic conditions. Accountable Care Organizations and pilots envisioned in PPACA should progress toward the same objectives as the PCMH.

Cafeteria Plans

Section 125 cafeteria plans are an important part of the benefits landscape, and the Chamber is working on several fronts to ensure that cafeteria plans are accessible and beneficial to both employers and employees. The Chamber is advocating to:

• Expand on the simple cafeteria plans created under PPACA.

• Urge Congress to change the law to permit self-employed individuals to participate in cafeteria plans.

Implementing Health Care Reform: Regulatory ActivityAs of April 2011, the U.S. Chamber of Commerce has submitted 20 comment letters in response to 7 Interim Final Rules (IFRs), 9 Requests for Comments (RFCs), 2 Requests for Information (RFIs), 1 Amended Interim Final Rule, and 1 Proposed Rule. Between July 2010 and the end of January 2011, at least 9 of the 16 comment letters that the Chamber submitted led to favorable modifications in the health reform regulations. The Chamber’s specific points,


Aliya Wong, executive director of retirement policy at the U.S. Chamber of Commerce, addresses the audience at a Chamber conference titled “On the Funding Edge: What Public Benefi t Plans Can Learn from Private Employers.”

(Left to right): Doug Holtz-Eakin, president of the American Action Forum; Scott Womack, president of Womack Restaurants; and Joe Olivo, owner/CEO of Perfect Printing, testify at a hearing before the House Ways and Means Committee on the impact of the new health care law on the economy and job market. Scott Womack testifi ed on behalf of the U.S. Chamber.


most of which have been incorporated through subregulatory guidance to modify prior regulatory materials, are discussed below.

Adult Child IFR

An overly broad definition of adult child would penalize more generous plans and employers that permit coverage of dependent nieces, nephews, grandchildren, etc., while these family members are dependent. We asked that the definition of adult child, as it relates to this requirement, mirror that of the Internal Revenue Code’s Section 152 (f )(1). The subregulatory clarification issued on September 20, 2010, adopted this point.

Grandfathered Plan Status IFR

The original flawed IFR has been revised through numerous subregulatory guidances as well as through an amended IFR.

• Changing Fully Insured Plan Carriers Originally, the IFR permitted self-insured

plans to change third-party administrators, while prohibiting fully insured plans from changing issuer or carrier without losing grandfathered plan status. Th e Chamber’s comments argued that all plans must be permitted to change policies and issuers and that the grandfathered plan status determination should be based on the coverage, as experienced by the enrollee. Subsequently, the Departments of Treasury, Labor, and Health and Human Services (HHS) issued an Amended Interim Final Rule on September 17, 2010, adopting our recommendations.

• List of Actions Exhaustive Th e Chamber’s comments asked that the IFR

be clarifi ed to refl ect that the list of actions enumerated in the IFR, which would cause a plan to lose grandfathered plan status, is exhaustive and that no other plan changes would result in the loss of grandfathered plan status. Th e Departments issued subsequent

subregulatory guidance on October 8, 2010, that made this clarifi cation.

• Defi nition of Plan Th e Chamber’s comments requested

that each benefi t off ering (e.g., Preferred Provider Organization, Health Maintenance Organization be assessed separately when considering grandfathered plan status. Th e Departments issued subsequent subregulatory guidance on October 8, 2010, making this clarifi cation.

• Changes to Benefi t Election Tier Structures

Th e Chamber’s comments highlighted the importance of permitting plans to revise coverage tiers and retain grandfathered plan status. Th e Departments issued subsequent subregulatory guidance on October 8, 2010, that incorporated our recommendation and clarifi ed that merely changing the tier structure will not cause a plan to lose grandfathered plan status. Th e question, instead, will turn on whether employer contribution rates remain virtually the same.

HEALTH CARE ACCOMPLISHMENTS

Randy Johnson, senior vice president of Labor, Immigration & Employee Benefi ts at the U.S. Chamber, speaks at a news conference in support of municipal pension transparency legislation. Sen. John Thune (R-SD), standing behind Johnson, and Rep. Darrell Issa (R-CA), not pictured, also spoke on the same subject.


• Wellness Programs Th e Chamber argued that implementing

enhanced wellness programs and increasing the permissible reward or penalty should not aff ect a plan’s grandfathered status. Subregulatory guidance issued on October 8, 2010, incorporated our recommendation and stated explicitly that group health plans may continue to provide incentives for wellness by providing premium discounts, among other things.

Patient Protections IFR

One IFR was issued to implement several patient protection provisions including prohibition on annual and lifetime limits and recessions.

• Annual Limits and Limited Benefi t Plans Th e Chamber met with the regulatory

agencies to discuss the signifi cant disruption that would result if these annual limit prohibitions were applied to limited benefi t (mini-med) plans. As a result, HHS’s Offi ce of Consumer Information and Insurance Oversight established a waiver process to exempt plans with low annual limits from

the requirement, when the imposition of the restricted annual limits would cause a plan’s premiums to signifi cantly increase or cause a signifi cant decrease in access to benefi ts.

• Rescissions Th e Chamber’s comments highlighted the

diffi culty employers may have due to systems constraints and notifi cation diffi culties. Subregulatory guidance issued by the Departments on October 8, 2010, incorporated our comments and acknowledged that, in some instances retroactive elimination of coverage due to a delay in administrative record keeping would not constitute a rescission.

Preventive Services Coverage IFR

The Chamber’s comments recommended that the Departments permit variations in co-pays or co-insurance for medication therapies when designated pharmacies or pharmacy benefits managers are used, and that plan sponsors be permitted to vary cost-sharing obligations for plan enrollees who select practitioners who are deemed to be of “high quality” and are in a specified “high-performing” provider network.


Bill Feinberg, president of Allied Kitchen and Bath, Inc., in Ft. Lauderdale, Florida, testifi es on behalf of the U.S. Chamber at the House Committee on Small Business hearing titled “Putting Americans Back to Work: The State of the Small Business Economy.”


In Subregulatory Guidance issued on December 22, 2010, the Departments committed to developing guidelines to permit a group health plan to use value-based insurance designs in the context of preventive care services. On December 28, 2010, the Departments issued a subsequent Request for Information on how group health plans can employ value-based insurance design in the coverage of recommended preventive services.

Internal Claims and Appeals and External Review IFRThe Chamber’s comments highlighted concerns, which we also voiced with the promulgating Departments, regarding the impossible compliance timeline.

Subsequently, Subregulatory Guidance was issued that provided several areas of relief:

• Generally, an enforcement grace period until July 1, 2011, will give plans and issuers time to make changes to comply with the new requirements.

• Fully insured nongrandfathered plans will be permitted to use existing state external review processes in one of the states in which they operate to comply with the new federal requirements.

• For self-insured plans, an enforcement safe harbor was created for plans that comply with interim measures, providing that no enforcement action will be taken during the transition period for these plans. Failure to contract with three independent review organizations will not automatically violate the requirements.

Medical Loss Ratio IFR

Before this IFR was issued, the Chamber met with the regulatory agencies to discuss the significant disruption that would result if limited benefit plans (mini-meds) were required to comply with Medical Loss Ratio (MLR) requirements. The IFR implementing the MLR requirements applied a numerical adjustment to the MLR calculation for those plans to address the unusual expense and premium structures of limited benefit plans so that the plans can more easily pass the MLR percentage test.

Tom Reeder, senior benefi ts counsel of the Senate Committee on Finance, speaks about retirement and tax issues at the Employee Benefi ts Committee meeting at the U.S. Chamber. Lynn Franzoi, committee chair and founder of LLF Consulting, listens in.



W-2 Reporting

Treasury and the IRS issued Guidance in October 2010 stating that an employer will not be treated as failing to meet the requirements and will not be subject to any penalties for failure to meet the requirements merely because it does not report the aggregate cost of employer-sponsored coverage on Form W-2 issued for 2011.

OTC Medicine and the Defi nition of Medical Expenses IRS Guidance

The Chamber submitted comments disputing the statutory authority for the Guidance (2010-59) that went beyond the law’s prohibition in using Flexible Spending Account (FSA) and/or Health Reimbursement Account (HRA) debit cards to purchase OTC drugs without a prescription. The Notice required substantiation after the purchase of OTC medicine with a prescription before an individual could be reimbursed from an FSA/HRA with tax preferred funds, which would create a perverse incentive toward non-OTC medicine which could be purchased with an FSA/HRA debit card initially. On December 23, 2010, the IRS issued new Guidance (2010-128) reversing the previous guidance and permiting the use of FSA and HRA debit cards to purchase OTC medicines

with a prescription. The new Guidance also stated that prescriptions transferred over the phone to pharmacists by prescribing providers would be permitted, as the Chamber comments requested.

Nondiscrimination Notice and RFC

In our comments, we asked the Departments to give employers and plans a reasonable time period to comply with the new rules. On December 22, the IRS issued a Notice (2011-1) addressing the timing of the application of this statutory prohibition. The Notice said that compliance should not be required until after regulations and other administrative guidance of general applicability have been issued. No concrete new effective date has been set; instead, the Departments anticipate that guidance will not apply until plan years beginning a specified period after issuance.

Institute of Medicine Survey on Essential Health Benefi ts

The Chamber submitted comments online in response to a survey conducted by the Institute of Medicine (IOM) at the request of the Secretary of HHS to help the IOM make recommendations on the criteria and methods for determining and up-dating the essential health benefits package. Three days after our comments were submitted, the Insti-tute of Medicine invited the Chamber to participate in a panel before the IOM’s Committee.


(Left to right): The U.S. Chamber’s James Gelfand, then-director of health policy; Katie Mahoney, director of health care regulations; and Aliya Wong, executive director of retirement policy, present updates on the work of the employee benefi ts team at a Labor Relations Committee Meeting.


Retirement Security

As the baby boomers move into retirement, there is a greater emphasis on ensuring that people have sufficient assets. Conversations surrounding retirement security include increasing coverage and participation, clarifying and strengthening fiduciary responsibilities, and working to reduce the risk that individuals outlive their retirement assets.

We anticipate further conversation and legislation on these issues:

• Automatic IRAs/Universal IRAs—oppose proposals that require an employer mandate, create a TSP II system, or increase ERISA fi duciary liability for employers.

• Decumulation Strategies—work with Con-gress and our membership to reach consensus on legislation to promote useful decumulation strategies pertaining to annuities, long-term care insurance, and other products without overly burdening plan sponsors.

Notice and Disclosure Requirements

We are increasingly concerned about the volume of required notices and whether participants are becoming overwhelmed with the volume of information being provided. Consequently, we are urging the Department of Labor (DOL) to take a comprehensive look at the benefit notices that are required and will make this a priority in 2011.

State and Local Pension Underfunding

The unfunded liabilities of state and local government pension plans are of significant alarm to Chamber members. The Chamber is concerned about the increased burden on taxpayers —both individual and corporate. Moreover, we fear that these benefits may give state and local governments an unfair advantage against private employers when competing for employees because the government provides greater benefits than employers can afford, and then employers pay for government-provided benefits through higher taxes. Therefore, we will continue to oppose proposals that would give state and local governments an unfair advantage against private employers when competing for employees.

RETIREMENT PRIORITIES

Members of the Chamber’s Employee Benefi ts Committee traveled from across the United States to attend the February 2011 meeting in Washington, D.C.


Multiemployer Plan Funding

Certain multiemployer plans have been particularly hard hit as the current financial crisis exacerbates long-term funding problems resulting from shifting demographic trends and financial problems in certain industries. Because of the nature of multiemployer plans, when one employer goes bankrupt, the remaining employers in the plan become responsible for paying the accrued benefits of all the workers; this is often referred to as “the last man standing.” As the number of employer participants dwindles, employers remaining in the plan see their liabilities increase exponentially—forcing them to cover retirees that never worked for them. This system results in untenable contribution levels for the remaining employers, which can force them into insolvency as well. Without reform, many employers—including a number of small, family-owned businesses—are in danger of bankruptcy.

The Financial Accounting Standards Board (FASB) issued two proposals that could substantially impact the business activity of employers that participate in multiemployer

plans. The Chamber views the proposed disclosures as generally overly burdensome and potentially misleading. We are concerned that they could have the unintended consequences of misleading investors and overly burdening employers and the plans. Therefore, the Chamber opposes both of these proposals and has urged FASB to reconsider these proposals, as the negative impact on employers will substantially outweigh the minimal benefit gained from providing the additional information.The Chamber will also do the following:

• Urge Congress to enact long-term funding reform for multiemployer plans.

• Monitor and engage with FASB as it evalu-ates and proposes changes to the accounting standards for measuring pension and other benefi t costs, obligations, and assets.

Defi nition of a Fiduciary

On October 21, 2010, the DOL issued a proposed regulation on the definition of a fiduciary under ERISA. We support the efforts of the DOL in updating the definition of a fiduciary. There have been significant changes in both the design of private retirement plans and the investment options and services provided for these plans. Although these changes have created increasingly complex investment schemes and financial arrangements, the determination of fiduciary status has not changed. Therefore, amending the definition at this time is appropriate. At the same time, we believe that the expansion of the fiduciary definition should not be freely interpreted to include every act related to a retirement plan. Rather, a balance needs to be struck that protects participants and allows for the free flow of information and services in the market.

Pension Funding

Since the financial crisis of 2008, businesses have continued to face unexpectedly large pension contributions. The drop in the value of pension plan assets, coupled with the current credit


(Left to right): Tom Reeder, senior benefi ts counsel of the Senate Committee on Finance; Katy Spangler, senior health policy advisor on the Senate HELP Committee; and Nick Bath, senior health policy advisor on the Senate HELP Committee, participate on a panel on health care and fi nancial issues at the Employee Benefi ts Committee meeting at the U.S. Chamber.


crunch, has resulted in companies facing pension contributions that are double or triple the amount of the expected contribution. The Chamber successfully lobbied Congress to enact the Worker, Retiree, and Employer Recovery Act of 2008 and the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010. Additional measures are needed, however, and the Chamber will continue to work with Congress to ensure their passage.

Financial Services Reform

While the Chamber successfully lobbied for a number of exceptions for pension plans in the Dodd-Frank Wall Street Reform and Consumer Protection Act, we are concerned that ensuing regulations could have a negative impact on employer-provided retirement plans. The Chamber has been working to make certain that this negative impact is minimized by ensuring that financial services reform regulations have a minimal impact on retirement plans.

Small Business Issues

Small business employers, like other types of employers, choose to offer benefits to their employees as a way to attract and retain talent. Many small business plan sponsors want to continue offering a variety of benefits but have their own unique issues when choosing to do so.

The Chamber is committed to decreasing the burdens on small business plan sponsors as follows:

• Tax Penalties Under Code Section 6707—urge Congress to pass legislation allowing the Trea-sury secretary to not impose a penalty for failure to disclose reportable transactions when there is reasonable cause for such failure. More than a half dozen of the reportable transactions involve employee benefi t plans used by small businesses.

• Interim Amendments—work with the IRS and Treasury to decrease the burden on small plan sponsors caused by the interim amend-ment requirements.

• Code Section 409A—urge Congress to amend Code Section 409A to limit the negative impact on small businesses.

Plan Fee Disclosure

Due to claims by plaintiffs and concern in Congress that fees in employer-provided plans are too high, there have been demands for greater disclosure of information on fees. The Chamber supports disclosure and transparency of information that allows participants to make informed decisions about their investments. In order to benefit participants, however, such information should be useful and easily understood. Moreover, it is equally important that disclosure requirements are not unduly burdensome to employers—particularly if the information is not meaningful to participants. The Chamber will work to ensure that overly complex requirements for plan fee disclosure, generated in response to attention garnered from lawsuits and the Hill, are not implemented by statute.

Phased Retirement

The Chamber is concerned about current retirement systems as well as ensuring that these systems continue to be valuable retirement tools. Encouraging the implementation of phased retirement programs is crititcal to this goal. The barriers to phased retirement are many and include legal, fiscal, policy, and practical issues. Phased retirement programs could be advantageous to employers, workers, and the overall economy. It would be injudicious for statutory and regulatory burdens to restrict what could otherwise be a beneficial situation for all parties. Rather, statutes and regulations should encourage employers to implement phased retirement programs that provide attractive benefits and incentives for workers to stay with their employers by continuing to address the legal, fiscal, policy, and practical barriers to phased retirement.



Defi ned Benefi t Plan Funding Relief

Since the financial crisis of 2008, the Chamber has played an on-going leadership role in lobbying for funding relief for defined benefit plan sponsors as follows:

• Passage of the Preservation of Access to Care for Medicare Benefi ciaries and Pension Relief Act of 2010. Th e Chamber took the lead in organizing companies and associations to lobby Congress for immediate action on temporary provisions and technical corrections to the Pension Protection Act of 2006 that would minimize adverse impacts on defi ned benefi t pension plans during the fi nancial crisis. After obtaining preliminary legislation on funding re-lief in 2008, the Chamber successfully lobbied for this additional needed relief to ensure that

pension contributions are not out of proportion to those required before the market downturn.

• Obtained regulatory relief on pension fund-ing. In October 2010, the IRS issued the fi nal funding rules that include interest rate relief for some defi ned benefi t plans.

• Passage of the Worker, Retiree, and Employer Recovery Act of 2008. Th e Worker, Retiree, and Employer Recovery Act of 2008 includes provisions permitting full smoothing of unex-pected losses, allowing suffi cient time to transi-tion to the PPA’s 100% funded target, clarifying end-of-year valuations, permitting fi xed interest rates to be used for Code Section 415 limit purposes, and providing emergency short-term relief for multiemployer plans.

The Chamber’s Employee Benefi ts Team (top row, left to right): Michael Billet, manager for research policy; James Gelfand, then-director of health policy; Walter Mullon, coordinator; Aliya Wong, executive director of retirement policy (bottom row, left to right): David Tully, legislative research associate; Katie Hays, executive director of congressional and public affairs; Randy Johnson, senior vice president; Caroline Gangware, staff assistant; and Katie Mahoney, director of health care regulations.

RETIREMENT ACCOMPLISHMENTS


Financial Regulatory Reform

Succeeded in having pension plans carved out of financial regulatory reform legislation. The Chamber successfully lobbied for several changes related to retirement plans in the Dodd-Frank Wall Street Reform and Consumer Protection Act in these areas:

• Exemption of retirement plans from the jurisdiction of the Consumer Financial Protection Bureau.

• Removal of the fi duciary duty requirement from swap dealers who enter into a swap with a retirement plan. Th is confl icting fi duciary duty would have eff ectively precluded swap dealers from entering into swaps with plans.

• Exemption of retirement plans from the defi nition of “major swap participant.” Entities that fall within this defi nition are required to maintain additional capital reserves, in addi-tion to other requirements.

• Exemption of stable value funds from be-ing regulated as “swaps.” Th e bill directs the Securities and Exchange Commission and the Commodity Futures Trading Commission to conduct a study to determine whether stable value funds are “swap” contracts and therefore subject to regulation under the legislation. Until the study is completed, the new rules for swaps will not apply to stable value funds.

Investment Advice

During the last session of Congress, the Chamber worked with Congress and the regulatory agencies to ensure that improvements made to the investment advice rules in the Pension Protection Act of 2006 (PPA) were not nullified. Congress considered legislation meant to change the investment advice provisions in the PPA by

prohibiting any investment advice being given by a “conflicted” party. The Chamber worked to prevent this legislation which would have repealed significant parts of the investment rules. In addition, the Chamber worked with the DOL to ensure that the regulations reissued by the current administration did not significantly vary from the original rules issued by the previous administration.

Plan Fee Disclosure

• Prevented onerous legislation related to the disclosure of fee information in retirement plans. Stopping this legislation allowed the DOL to move forward with the regulatory process, which permitted greater input from the business community and less onerous disclosure requirements.

FASB Reporting for Multiemployer Plans

• Successfully delayed implementation of a proposal that would have required a number of overly burdensome disclosures that would have had a negative fi nancial impact on busi-nesses that contribute to multiemployer plans. FASB is reconsidering the rule as drafted.

Roth Conversions

• Obtained legislation to allow for conversions into Roth 401(k) accounts where the em-ployer plan voluntarily off ers such accounts to create parity between Roth 401(k) accounts and Roth IRAs.

Limited Scope Audit

• Successfully opposed an ERISA Advisory Council recommendation to eliminate the lim-ited scope audit as an option for plan sponsors.

RETIREMENT ACCOMPLISHMENTS

U.S. Chamber of Commerce1615 H Street, NW | Washington, DC 20062

www.uschamber.com



u.s. chamber of commerce health and retirement priorities

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