NEWSMAKER #1 John Boehner

By Jeremy Smerd

Dec. 29, 2006

Rep. John Boehner’s focus on pension reform did not begin when he persuaded 76 Democrats to vote July 28 for HR 4, a bill he sponsored. It began seven years earlier.

    As chairman of the House Subcommittee on Employer-Employee Relations in 1999, he developed expertise in pension minutiae and a vision for reform by holding a series of hearings on the issue.

    “It seems to me he has a good grasp of the intricacies and all the working pieces of what is an extremely complex issue,” says Martha Priddy Patterson, a director with Deloitte Consulting’s human capital practice.

    Boehner’s expertise helped him usher in the first significant changes to pension law in three decades, an effort that culminated August 17 when President Bush signed the Pension Protection Act into law. The bill was among the most sweeping pieces of legislation during the 109th Congress. Its passage marked a divergence from the partisanship that had sunk previous attempts to address issues central to the vitality of American business and the quality of life employees expect when they retire.

    Boehner, a Republican from Ohio and the majority leader, decided to focus on modernizing pension rules when he became chairman of the Education and the Workforce Committee.

    “He saw a huge need that was not being met by today’s laws, which were working against rank-and-file workers when it comes to their pensions,” says Kevin Smith, Boehner’s director of communications.

    But it wasn’t until U.S. airlines faced bankruptcies, raising the specter of a taxpayer bailout of the Pension Benefit Guaranty Corp., that the rest of Congress was willing to make the bipartisan effort to pass pension legislation.

    The law gives airlines more time to fund pension liabilities, allows the use of cash-balance plans and requires employers to fully fund pension plans, amortizing their deficits over seven years. The legislation also makes Roth 401(k) accounts and 401(k) catch-up contributions permanent retirement plan features. It encourages employers to automatically enroll employees in 401(k) plans.

    “Doing something big is never easy,” Smith says. “When you work on a bill for six years, you understand very quickly that things take time. Things take perseverance and a lot of commitment.”

Background: John Boehner was first elected to the House of Representatives in 1990. He helped close the House Bank, an effort that exposed corruption and led to the Republican takeover of Congress in 1994. Boehner became House majority leader in February, winning a three-way race to succeed former Rep. Tom DeLay. After the November elections, Boehner was voted to become House minority leader when the 110th Congress convenes in January.

Workforce Management, December 11, 2006, p. 22Subscribe Now!

Jeremy Smerd writes for Crain’s New York Business, a sister publication of Workforce Management.

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