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Legislative Overview of the 109th Congress
Delegates received an overview of federal and state legislation during the first day of the conference from NCPERS' representatives on Capitol Hill, Legislative Counsel Fred Nesbitt and Director of Governmental Relations Hank Kim.
 The most significant issue this year will be the White House's top legislative priority: Social Security. Nesbitt reported that President Bush's proposals have been adamantly opposed by Democrats, and ignored-if not opposed-by most Republicans. A bill embracing the president's suggestion for personal accounts has yet to be offered. Hearings on the issues, yet to be scheduled, are expected in June.
After reviewing details of President Bush's privatization plan, he detailed the NCPERS alternative proposal and referenced the NCPERS Washington Report, distributed during the conference.
Nesbitt noted that many state legislatures were considering pension privatization proposals-in addition to the well-known California situation. During the conference the Alaska State Legislature was considering a similar proposal, one that would also force new employees into a defined contribution plan.
Next, Nesbitt offered an overview on the 109th Congress, focusing first on the changes in the number of seats each party holds in both chambers. He noted the changes in party leadership and committees of significance. Nesbitt then reviewed the major issues NCPERS will follow during the first session of this Congress.
In addition to proposals to privatize Social Security, Nesbitt said he expects Congress to again consider bills that would mandate Social Security coverage for public employees. Another major issue he and Kim will monitor is health care. In particular Nesbitt expects bills to be introduced this year that would limit health care-related lawsuits.
Because many airline and auto industry pension plans are facing default, Nesbitt expects to see many private sector plans turned over to the Pension Benefit Guarantee Corporation. The PBGC itself is facing a funding shortfall of $23.3 billion. As a result, Nesbitt expects numerous pension reform proposals to be introduced before the August recess. He stressed that in the next year the shortfall "could create a financial crisis greater than the savings and loan crisis."
 Kim then discussed the NCPERS Healthcare Enhancement for Local Public Safety (HELPS) Retirees Act. This bill, HR 2177, was introduced by Reps. Chris Chocola (R-IN) and Richard Neal (D-MA).
This bill would allow public safety retirees to use up to $5,000 of a governmental defined benefit pension, 403(b) or 457 plan for health insurance premiums on a pre-tax basis. The bill was introduced with 74 cosponsors and has been referred to the House Ways and Means Committee.
Kim also reviewed NCPERS' proposal for dealing with escalating retiree health care costs. The concept calls for creating Retiree Medical Trusts (RMTs), as explained in a booklet distributed to the NCPERS' members prior to the conference. (To receive a copy, contact NCPERS by email (info@NCPERS.org) or phone (1-877-202-5706). This issue was addressed in more detail during one the breakout session entitled: "Creating a Tax-Free Retiree Medical Trust."
In closing, Kim also discussed the 2000 Erie County, PA decision, which ruled that Medicare bridge/wrap-around plans violated the Age Discrimination and Employment Act (ADEA). In April 2004 the EEOC proposed a rule to permit such arrangements. AARP sued to prevent enforcement of the act. In March 2005 a federal court agreed with AARP and barred enforcement of the new EEOC rule. The case is currently under appeal.
Fred Nesbitt has been NCPERS' executive director and legislative counsel since 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.
Hank H. Kim, Esq. joined NCPERS after serving for six years as a legislative representative for the IAFF. Previously he worked in the field of health care and for former Senator Bill Bradley of New Jersey. Kim earned his law degree at Indiana University-Bloomington School of Law and is a member of the DC Bar.
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