Insurers Like New U.S. Pension Bill In Part

The bill, which was passed by a 255-163 vote, would require defined contribution plan administrators to provide participants with 30-days notice of a lockdown period when participants are not allowed to divest or diversify their assets.

In addition, it imposes fiduciary liability on employers during lockdowns unless the employer meets certain requirements, such as limiting the lockdown to a "reasonable" period and acting solely in the interests of participants when determining to enter it.

From the insurance company and agent perspective, H.R. 3762 contains language strongly supported by the industry which allows those who provide services to pension plans to also provide investment advice to plan participants, subject to disclosure requirements.

Regarding the overall bill, Mark J. Ugoretz, president of the Washington-based ERISA Industry Committee, an employers group, questioned whether Congress fully considered the implications of the legislation.

He noted that, last year, Congress enacted a pension reform bill, the Portman-Cardin Act, that was the result of five years of drafting, redrafting and vetting.

"But this bill (H.R. 3762) flew through the House before anyone could fully assess all of the implications it will have for employee retirement savings," Mr. Ugoretz said.

"Nor did the House have an adequate opportunity to determine whether pension issues are at the core of the Enron employees' troubles," he added.

H.R. 3762 was developed in the wake of allegations that Enron abused employees who participated in the bankrupt company's pension plan.

As for the investment advice component of H.R. 3762, Kathryn Ricard, vice president of retirement and pensions with the Washington-based American Council of Life Insurers, praised the legislation.

The financial services firms that are already providing services and products to plan sponsors, such as life insurers, are the best equipped to advise employees on their investments, she said.

The language, Ms. Ricard said, will give employees access to a wide range of financial professionals as they make their investment decisions.

The investment advice language is also strongly supported by the National Association of Insurance and Financial Advisors, Falls Church, Va., and the Independent Insurance Agents of America, Alexandria, Va.