Legislative Overview of the 108th Congress
Frederick H. Nesbitt, NCPERS Executive Director/Legislative Counsel
NCPERS is overall pleased with what happened in Washington since last year's NCPERS conference, yet a number of threats to public pensions still demand the organization’s vigilance.
On the bright side, according to Fred Nesbitt, NCPERS’ legislative counsel, the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) offered several pension improvements. The new law allows for increased contribution limits for 401(k), 403(b) and 457 plans, catch-up provisions, and purchase of service credit.
At the same time, Congress was unable to address Social Security reform. The federal deficit is causing concerns about NCPERS' battle to stop mandatory Social Security coverage, and the White House is still pushing private retirement accounts within Social Security.
Two members of Congress who are friends of NCPERS--Rep. Steny Hoyer (D-MD) and Rep. Stephanie Tubbs Jones (D-OH)--joined the conference via video. Hoyer asserted that “the people NCPERS represents are the most vulnerable to tax cuts." He urged NCPERS members to support tax cuts that would benefit middle and lower income workers and to push for health insurance coverage of all Americans.
Tubbs Jones reiterated her opposition to mandatory Social Security coverage, which would reduce the Social Security benefits of government retirees, and private retirement accounts. She stated, "I am adamantly opposed to mandatory Social Security coverage." She serves on the House Ways and Means Committee, which has jurisdiction over this issue.
Nesbitt said that a bill now before Congress, HR 1776, “is almost everything we want” as it relates to public sector pension plans. It would expand retirement savings, establish tax credits to help pay for retiree health care premiums, accelerate catch-up provisions and eliminate penalties for early distribution from a DROP. “It’s a lobbyist’s dream come true, but it’s also a very controversial bill.” Nesbitt said the complicated nature of the bill makes its passage more difficult.
As to health care, Nesbitt said NCPERS was focused on “how to protect pension checks from spiraling health costs.” Using one company as an example, he said that employee health care premiums rose 13% last year, while retiree health care premiums rose 135%. “Some of the retirees see health care premiums that are more than the amount of their pensions,” he said.
Nesbitt has been NCPERS’ executive director and legislative counsel since October 2000. Prior to this position he served for 12 years as director of Governmental Affairs and Political Action for the International Association of Fire Fighters, and for nine years was special assistant to the president of the National Association of Letter Carriers.
He has been a lobbyist on Capitol Hill for 24 years, lobbying on pensions, taxes and employee benefits for both federal employees, and state and local government employees.