Senate Votes to Block Cash Balance Plan Rules

The Senate voted Thursday to block the Treasury from issuing pension rules on cash balance plans, following the House of Representatives in trying to stop changes that can reduce payouts to older workers.

On a voice vote, the Senate moved to stop the Treasury from finalizing the proposed regulations it issued last year allowing U.S. companies to convert from traditional pensions to cash balance plans.

“Withdraw this regulation,” Sen. Tom Harkin (D-Iowa) said as he introduced his amendment to an annual spending bill that funds the Treasury Department. “We must not let this age-discriminatory practice resume.”

The Treasury responded that it would work with lawmakers. “We are considering how best to proceed,” department spokeswoman Tara Bradshaw said.

Employers condemned the Senate action.

“Today’s vote on the Harkin amendment is a serious blow to the nation’s pension system,” said Mark Ugoretz, president of the ERISA Industry Committee, which represents large employers with a financial stake in the outcome of the pension rules.

The controversy over conversion to cash balance plans comes as firms struggle to fund traditional pension plans and Congress and pension regulators wrestle with ways to curb growing bailouts of older-style plans.