From today's NewsDash by Plan Sponsor:　Feb. 6, 2003

SURVEY SAYS: It's a long way from final but the new pension proposals from the Bush administration certainly have stirred things up. A number of providers and industry groups have lent their support - and more recently a number of other industry groups and experts have weighed in against it. But this week, we wanted to know what YOU thought about the proposed ERSAs (Employer Retirement Savings Accounts)..

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There was a decidedly negative reaction among the readership - at least at this point. Nearly 30% of this week's respondents said the proposal ignored the real problems of retirement savings, and roughly 25% said it was too much for the wrong people..

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In the latter group was the reader who noted, "They always say they are trying to help the "little guy," but does it really? If a small employer can put away $15,000 outside of a plan, why would they bother to have one and all the administrative headaches that go along with one?".

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Also in the latter camp was this "frontline" perspective, "I'm fresh off doing hundreds of employee enrollment meetings for a variety of companies. I talk about the new $12,000 limit for 2003 and mostly get snickers and giggles from the audience. Only the highly compensated individuals are able to meet those limits. When I talk about the low savers credit on this year's tax return, the room becomes interested as people scratch down the directions and ask more questions. This is where most of the participants I deal with are centered.".

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One willing to give the Bush Administration the benefit of the doubt opined, "Perhaps President Bush means well, but, has he surveyed small employers or any employers for that matter?????".

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Only about 10% thought it was "just what the doctor ordered," while about 17% said it was a step in the right direction. One noted, "I'm 100% for it. We must have better vehicles to encourage the workforce to save for the future. Unfortunately, many companies are doing away with their defined benefit plans, new companies can't afford to install them, and we can't count on social security to provide enough to live on. Simplifying the qualification/discrimination rules for a tax-deferred savings plan should make it easier to manage, less costly to administer and, just maybe, encourage employers (as well as employees) to contribute more towards retirement savings.".

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Another noted, "This proposal will be opposed by those who thrive on fees developed in servicing plans with exotic plan designs, by those whose service is made necessary by compiling unwanted government forms, by those who cannot provide a cost competitive retirement account, and by those who see anything that might do anything good for highly compensated folks as a call to class warfare." .

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As for suggestions on other steps, there was the reader who offered, "Now if they would only fix the defined benefit plan rules.".

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Eighteen percent thought it was too soon to tell - but most of these seemed to be predicated on the assumption that this proposal was a long way from final. One reader presciently observed, "It would seem that Bush's proposal surprised many of the legislators that are both well informed on retirement issues and experienced in crafting the laws and working through the system. My opinion is that while something will come out of this proposal, it will be drastically different from the original proposal." And another said, "I think it is too soon to tell. Most professional organizations will not approve of the changes, as their plans are geared to provide more benefits to higher paid employees by cross-testing, integration, or some other allocation method....In fact, with increased dollar limits for IRA-type accounts and no dollar limit, why not just contribute the max to your own and leave your employees alone? I just wish congress would leave retirement plans alone for a few years, and play with some other areas.".

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But this week's Editor's Choice posed an interesting question/observation: "Because politicians and lobbyists are involved, I wonder if ERSA is the illegitimate love child of ERISA and IRS?.

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