US - Federal employees would have to contribute 1.2 percentage points more of their salary towards their retirement plans under plans put forward by President Barack Obama.
Obama's latest deficit reduction proposal, aimed at cutting at least $1.5trn from the federal government's budget deficit over the next 10 years, also recommends that the PBGC set its own risk-based premiums.
The increase, which would be phased in over a three-year period, has been strongly criticised by the leader of the US' largest independent union of federal employees, who said federal employees were being unfairly targeted.
"Federal employees are already under a two-year pay freeze-which amounts to a $60 billion contribution from federal workers over the next 10 years-and now they are being asked to contribute additional money to their retirement without an increase in benefits," said National Treasury Employees Union (NTEU) president Colleen M. Kelley.
"NTEU strongly opposes these proposals and will continue to make our opposition known to the Super Committee and Congress."
In a letter sent by Kelly to the members of the congressional Super Committee on debt reduction earlier this month she added: "federal employees didn't cause this (economic) crisis, and the crisis won't be solved by cuts to federal employees."
Meanwhile, the Department of Labor's Employee Benefits Security Administration is to re-propose its rule on the definition of "a fiduciary" following calls for more time to consider the issue.
The decision to clarify the meaning of the word was first made in January, but has now been extended following requests from the public, including members of Congress, that the agency allow an opportunity for more input on the rule.
The DoL said when finalised, the initiative will safeguard workers who are saving for retirement as well as businesses providing retirement plans to workers.
"We have said all along that we will take the time to get this right to ensure that we provide the strongest possible protections to business owners and retirement savers in plans and IRAs," said EBSA assistant secretary Phyllis Borzi.
"Investment advisers shouldn't be able to steer retirees, workers, small businesses and others into investments that benefit the advisers at the expense of their clients. The consumer's retirement security must come first."
The agency said any new input would bolster more than 260 written public comments already received, as well as two days of open hearings and more than three dozen individual meetings with interested parties held by the agency.
The agency is seeking to amend a 1975 regulation, which defines when a person providing investment advice becomes a fiduciary under the Employee Retirement Income Security Act, in order to adapt the rule to the current retirement marketplace. It hopes to ensure that potential conflicts of interest among advisers are not allowed to compromise the quality of investment advice received by the public.
Specifically, the agency anticipates revising provisions of the rule including clarifying that fiduciary advice is limited to individualised advice directed to specific parties, responding to concerns about the application of the regulation to routine appraisals and clarifying the limits of the rule's application to arm's length commercial transactions, such as swap transactions.
The new proposed rule is expected to be issued in early 2012.
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