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WASHINGTON – Will a key piece of pension and retirement reform legislation backed by credit unions be in limbo now that both of its co-sponsors have changed their career paths? The bill in question is the Pension Preservation and Savings Expansion Act, introduced by the former Rep. Rob Portman (R-Ohio) and Rep. Ben Cardin (D-Md.) in 2001. Portman has left Congress to become a U.S. Trade Representative and Cardin has announced his plans to run for Sen. Paul Sarbanes’ (D-Md.) seat in 2006. Sarbanes, a long-time supporter of credit union issues, said in March that he will not seek a sixth term and plans to retire. So where does that leave the bill that has garnered heavy support since its inception from both CUNA and NAFCU? “Cardin’s office has indicated that they would like to work on these issues,” said Brad Thaler, NAFCU director of legislative and political affairs. “We’re not sure yet who will replace Portman as the lead. (House Ways and Means) Chairman Bill Thomas has made some comments that he may want to look at a comprehensive package that addresses Social Security and other retirement savings reforms.” Thaler said another option may see a larger bill that will not include Social Security reform given its “very political” activity. “Some might be wary of tying the (Portman-Cardin) bill to Social Security reform or even pulling out select measures from the bill,” Thaler said. Just a week before Sarbanes announced his retirement plans, CUNA President/CEO Dan Mica wrote both Portman and Cardin urging them to include a Savers tax credit for low- and moderate-income taxpayers. Enacted in 2001 as a temporary measure, the credit aims to provide a government matching contribution for voluntary contributions of moderate- and lower- income individuals to 401(k) plans, individual retirement accounts and similar retirement arrangements. Although it has successfully increased retirement savings, its current status limits its ability to provide significant help to low- and middle-income families, Mica said. The Portman-Cardin bill would accelerate scheduled increases in IRA and retirement plan savings limits to $5,000 and $15,000, respectively and accelerate the scheduled increase in catch-up contribution limits for workers age 50 and older, which are generally to $5,000 for retirement plans and $1,000 for IRAs. It would also make permanent savings and pension reforms enacted in 2001, which are scheduled to sunset in 2010. Other provisions include allowing workers the right to diversify company stock in 401(k) plans; provide a new tax incentive to help employees pay for retirement advice and counseling; change the age for mandatory withdrawals from 70 to 75 years; and give retirees the option to use pre-tax income from their retirement savings account to pay for health care premiums. Credit unions have a stake in the bill as many of its measures may serve as retirement savings alternative for members, John McKechnie, CUNA’s senior vice president of governmental affairs has said. “The credit union movement is ideally positioned to play a central role as Congress looks at retirement savings options for American consumers, and I look forward to CUNA’s participation in this process in the 109th Congress,” said McKechnie. Meanwhile, Thaler is optimistic about the bill’s future. “No one has said since Portman has left Congress, this won’t move,” Thaler said. “I expect Cardin will remain involved but obviously running for Senate will take up some of this time. The bigger question is who will pick it up on the Republican side and what will they do with it.” -

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