Grace note

August 07, 2006

Congress has gone off on its summer recess, leaving behind the detritus of a sharply divided body so intent on conflicting partisan goals that cooperation often seems impossible.

Freshest debris comes from legislation combining what would have been the first minimum-wage increase in nine years with a break on estate taxes for the very wealthiest Americans - a deeply cynical pairing that quite properly blew up,

Yet, on a final grace note, the Senate overwhelmingly approved last week and sent to President Bush for his signature the first major overhaul of federal pension regulations in three decades - a compromise seven years in the making that also won wide approval from the House.

It was one of those increasingly rare occasions when the legislative process worked as intended. Workers will gain new pension protections, employers will get help designing benefit plans to fit their circumstances, and the transition already under way - from workers relying on a career-long employer to preparing for retirement on their own - should be eased.

Coming at a time when more and more employers are bailing out of long promised but underfunded pensions, leaving workers such as those at Bethlehem Steel in the lurch, the legislation is an achievement in which all lawmakers can take pride.

Specifically, the bill would require employers to increase their contributions to the traditional, defined-benefit pension plans that still serve 44 million workers and retirees so that they are fully funded within seven years. Employers who fall behind have to make extra catch-up payments, but those are put on a more gradual schedule to avoid forcing employers to renege on their obligations.

At the same time, the measure includes incentives for workers to save on their own for retirement, such as automatic enrollment in 401(k) programs, and extension of $2,000 tax credits for low- and middle-income workers who establish retirement savings.

Some, notably employers, have complained that the tougher rules would speed the transition from traditional pensions to cash payouts or joint savings plans. But workers will nonetheless be aided by greater protections for their existing benefits.

Pension legislation is so complex, it doesn't lend itself to sound bites, and in this case neither party can claim exclusive ownership. It's just good government. How quaint.

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