Committee on Investment of Employee Benefit Assets.

You could say a committee's work is never done. That's especially true for FEI's Committee on Investment of Employee Benefit Assets, which is actively working to channel the changing policy winds on retirement income policy to enhance benefit security for plan participants. CIEBA members represent 150 corporate pension plan sponsors that collectively have fiduciary responsibility for more than $900 billion in pension plan assets.

"Our purpose is twofold," explains Myra Drucker, assistant treasurer at Xerox Corp. in Stamford, Conn., and 1995-96 committee chairman. "We're here to provide a forum for corporate plan sponsors on fiduciary and investment issues, and we address policy issues that will affect companies' ability to offer retirement plans." CIEBA aims to proactively demonstrate the vitality and success of the private retirement system to legislators, regulators and the public, so the occasional problem or abuse doesn't taint the entire system, she explains.

The committee's stance, says Jim Bayne, manager of benefits finance and investment at Exxon in Irving, Tex., and the 1997-98 chairman, is that Congress should preserve employer flexibility in designing defined-benefit and defined-contribution plans and avoid legislating mandates that stifle an important source of national savings and retirement security. To these ends, CIEBA spent three years working with the Department of Labor "to provide a bright-line test to distinguish investment information and education from investment advice in defined-contribution plans," Bayne notes. As a result, the department issued guidelines that gave companies more flexibility in providing investment information and education to their employees. "Judging from the response CIEBA's received from the broad FEI membership, we really filled a need," he reports.

On a different note, Drucker points out, "As retirement assets grow, more companies may decide to manage them internally." That's why the committee also sought and obtained an investment-adviser exemption for in-house plan administrators that removed unnecessary red tape and preserved administrative flexibility for companies with internal asset managers.

The committee successfully urged modifications in 1996 to the ERISA Clarification Act, which sought to exempt assets in insurers' general accounts from ERISA's fiduciary standards and, according to CIEBA, would have overturned a 1993 Supreme Court decision affirming ERISA protection. In a letter to the House leadership, the committee declares unequivocally, "The retirement security of millions of employees is too important to sacrifice."

When the dust settled, President Clinton had signed a revised act on August 20, 1996, extending ERISA's fiduciary standards to all insurance general account contracts. With the change, any employee benefit plan supported by an insurer's general account assets will become subject to ERISA standards as of January 1, 1999.

Another CIEBA initiative was preserving employers' investment flexibility under ERISA. Last year, Sen. Barbara Boxer (D-Calif.) introduced a bill to limit 401(k) investments in employer stock to 10 percent. CIEBA viewed the proposal as a warning shot of things to come, as policymakers realize the growing importance defined-contribution plans play in providing retirement income. "CIEBA and other business groups successfully warded off this first intrusion into plan design and investment," Drucker reports. Bayne explains that while similar proposals have been introduced in the 105th Congress, "the 10-per-cent limit on employer stock and properties is now more narrowly focused only on certain employer-directed contributions."

CIEBA is also reaching out directly to FEI's entire membership. "We're very much aware that we are part of the overall FEI organization, and we want our work to benefit all members," says Bayne. "That's why we will be encouraging FEI members to participate in CIEBA's next telediscussion on 401(k) issues," he reveals. For more information, contact Gina Mitchell, director of government relations in FEI's Washington office, at [phone].