- The Washington Times - Monday, November 6, 2000

15 minutes with … James Klein

Health insurance, retirement plans, Social Security reform these have become buzzwords of the current election.

The American Benefits Council, with President James Klein at the helm, is hard at work lobbying on those issues on behalf of their member companies Fortune 500 employers as well as human resources consultants.

The D.C.-based group recently moved into the 2000s with a name change, discarding its arcane moniker, the Association of Private Pension and Welfare Plans.

The council is capitalizing on high awareness of benefits issues by trying to educate members of Congress on its companies' priorities. The group also recently conducted an opinion survey, aided by Harris Interactive, of benefits professionals.

Question: So let's talk about the survey a little bit. What were you trying to find out, what did you find out, who did you survey?

Answer: Well, it struck us that for all of the public opinion surveys that are done, that nobody had ever really asked the folks who really design, administer and pay for these benefit plans, what their opinions are with respect to what the priorities should be for our public policy makers and what they see as the emerging issues in their field.

Q: What kinds of things did you find out?

A: Probably the most dramatic one was that we asked our members, "How important do you think employee benefits are to the competitive success of American business?" And because these were senior human resource professionals, it's not a surprise that they felt it was very high, that's their job.

But what was very interesting, we asked them, "Compare how important you think it is now to how important you think it was 10 years ago." Thirty-six percent felt that [10 years ago] employee benefits were very important to the competitive success of American business. Today, 76 percent. So it more than doubled …

One of the other interesting [findings] is that we asked them, "Do you think that the discussion of employee benefits issues in the current elections has helped, hurt or made no difference in the public's understanding of these issues?" And those results were somewhat disturbing, because only 10 percent of our members felt that the election discussion of these issues has helped the public's understanding. 37 percent said it hurt, and 53 percent said it made no difference.

… And so the challenge to us as an organization and to our benefits community at large is trying to elevate the level of discourse about these issues in the political realm because it's so important in the economic realm.

Q: Why do you think people still do have a limited understanding? The candidates are certainly talking about these issues.

A: I may have misspoken. It wasn't that their employees don't have an understanding, what they felt was that the level of the dialogue in the elections hadn't contributed to an understanding in the general public of these issues.

I don't know whether, if you will, the blame for this lies at the feet of the candidates themselves for being somewhat superficial in terms of their discussion about the issues; whether there may be fault with how these issues are covered in the media; or whether the fault lies with the public at large who are willing to accept less than a thorough dialogue and sound bites instead as opposed to more thoughtful analyses.

Q: So now that you've done the survey, where do you go from here? What do you do with that information?

A: Well, the survey has given us a lot of good information which we're going to use in our meetings with the next administration, whoever it may be, and the next Congress.

Also, we asked our members to identify what they felt were the most important emerging benefits issues and here the top two items were long-term care [insurance] and what's called phased retirement changing the rules to help facilitate the ability of people to help phase out of their work into retirement as opposed to an abrupt change.

Q: Is there anything going on or has anything gone on in this Congress that deals with those two issues, policy-wise?

A: Yes, in fact they're trying to liberalize some rules on long-term care and make them more generous … [It] is caught up in part of the current debate that's hung up in the Congress at the moment.

On the issue of phased retirement, there has been some initial testimony gathered. Sen. [Charles E.] Grassley from Iowa and Congressman Earl Pomeroy of North Dakota, Republican and Democrat, have introduced bipartisan legislation in the Senate and the House to begin to address one of the big impediments in the law that prevents employees from benefiting from phased retirement. So those have been laid down as markers and we think they'll be good starting points for consideration next year.

Q: On phased retirement plans, is that something that employers want to do? I mean, you would think they'd get someone to replace that person full-time, but they're still maybe paying that person part-time as they're being phased out.

A: No, not actually. Phased retirement is one of those terrific issues that is good for both the employee and the employer. Where it's being implemented, since it's a strictly voluntary thing, it serves the needs of both that company as well as the employee.

Because typically what would happen is that the employer would not fully replace that employee and then also have that person on a reduced basis. Or if they would, it's because they have the workload to warrant it. And in the tight job market, employers don't want to lose their most valued employees.

One of the anomalies in the current law is that if you leave your employer, you cannot begin to collect your pension and right away get rehired by your employer if in fact they need you. There's all sorts of complicated hoops that you have to jump through. But there's no prohibition on you going down the street and working for your former employer's competitor.

Q: What are some of the other policy issues you're working on? I know retirement savings plans, you guys have been active on that, what's going on on that front?

A: Well, we've been working very hard on the bipartisan pension reform which has now passed the House of Representatives three times, most recently as part of the tax bill. But on its own, [it] passed the House with 401 votes.

It's very unclear at the moment whether or not we're going to be able to get that item pushed over the line here before Congress adjourns, even though there is this vast bipartisan support in the Senate, it was approved by the Senate Finance Committee on a unanimous vote of Republicans and Democrats. This has been a huge issue for us over the last couple of years.

Q: What are some of the features of it?

A: Some of the features of it would be to restore some of the cutbacks that were made in 1993 to the amount of benefits that can be received from a plan, or the amount of contributions that one can make to a 401(k), or other types of defined contribution plans.

One of the features we're most proud of that we had a large hand in crafting is one that would permit employees over the age of 50 to make additional contributions to their plans.

We think this is a particularly important provision for working women who are much more likely to have stepped out of the formal work force for a period of time. They may have had education expenses for their kids as well, and now they're coming back into the work force with relatively few years left before they retire, and they need to catch up for those lost years.

The bill also would simply remove some of the layers of complexity that are applied to employer-sponsored pension plans that built up over many years of tax bills that added different regulations.

Q: What are some of the other policy issues? The patients' bill of rights is on the list.

A: The patients' bill of rights of course has been a huge area of concern to our members in terms of the unlimited liability that some of the versions of the measure would impose on employers related to the administration of their health care plans.

Other proposals that we've been working on relate to measures that would make it easier for employers and their service providers to extend advice to 401(k) plan participants on how they might want to invest their money.

There's also been legislation that would help encourage greater ownership of stock amongst company employees so the benefits of stock ownership would be extended beyond the top management to more individuals within a company.

Q: Do you do any work on the Social Security front as well?

A: We do. And actually one of the interesting questions that we found in our Harris survey was we asked our members, "How confident are you that Congress will consider fully the implications on the private employer-sponsored retirement system when it moves forward on Social Security reform?"

And our members reported to us that they were not confident that that will get full consideration. So our part of the forthcoming Social Security debate will be to make sure that the new president and the next Congress keep fully in mind what the implications will be on private, voluntary employee-sponsored pensions when they make various changes to the public Social Security system.


James Klein, president, American Benefits Council

Age: 43

Favorite quotation: "There's no limit to what you can get accomplished in Washington if you're willing to let someone else get the credit for it." Harry Truman

Education: J.D., George Washington University; B.A. in bioethics, Tufts University

Experience: Deputy executive director, American Benefits Council, 1988-92; manager, pension and employee benefits, U.S. Chamber of Commerce, 1984-88; employee benefits attorney, 1983-84; legislative assistant, Rep. John LaFalce, New York Democrat, 1980-83

What I drive: Toyota Camry

What I'm reading: "City of Light," by Lauren Belfar

My family: Wife Lynn and daughters Jennifer, 13 and Lexi, 10

How to contact me: 202/289-6700, [email protected]

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