Hasty Legislative Items Often Are Unhelpful

 

Friday, Jul 10,2009, 12:22:28 PM   Click:

We have never been fans to load the legislation with the provisions unrelated to the core of the proposal.

The reason we do not like this approach legislators often fail to give control of these add-on and often buried provisions deserve. This was the case recently with a 401 (k) plan fee disclosure measure.

Perhaps the best example of the unfortunate consequences of the add-on approach came in 1986 when Congress passed a tax reform law mass. Nestled in the provisions that have been created unworkable and unnecessary for the rules of non-discrimination as employer-sponsored health care plans.

t is safe to say very few legislators knew the provisions were in the bill, much less how the rules were structured. Ultimately, the nondiscrimination rules were repealed, but only after employers wasted millions of dollars trying to understand them.

We fully recognize there are times when unrelated provisions are added to a broader bill. They may be important and necessary, but lack support to pass as a free-standing bill.

A recent case in point is a measure passed last month by the House Education and Labor Committee to improve disclosure of 401(k) plan fees, among other things. Just prior to its approval, amendments were tacked on to temporarily ease tough pension plan funding rules that Congress passed in 2006.