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Rep. Nancy Johnson (R-CT) and Rep. Earl Pomeroy (D-ND)
HR 1656 (1997): The Secure Assets for Employees Plan Act

This legislation was designed to address the lack of defined benefit coverage and limited savings opportunities for the employees of small employers. The bill would create a new safe harbor defined benefit retirement plan for small businesses which could provide all their employees with a secure, fully portable, benefit. It utilizes the best features of both defined benefit and defined contribution plans by providing a fully funded minimum defined benefit - with a higher benefit if investment returns exceed conservative expectations. The minimum defined benefit level of SAFE plans, which would be contributed by employers to each employee's plan annually, would be equal to 1 to 3 percent of compensation for each year of service. Small employers would be able to maintain financial flexibility by adjusting the size of their contributions to the plan depending on the yearly performance of their businesses. The benefits would be funded either through an individual retirement annuity ("SAFE Annuity") issued by regulated financial institutions or though a trust ("SAFE Trust") whose investments would be restricted.

Secure Assets for Employees ("SAFE") Plan Act of 1997

Following is a description of the SAFE Plan Act as introduced by Rep. Nancy Johnson (R-CT) and Rep. Earl Pomeroy (D-ND) in 1997:

SAFE plans will provide all small business employees with a secure, fully portable, defined retirement benefit they can count on without choking small business with complex rules and regulations small business cannot afford.

Fully Funded and Secure Retirement Benefit:

Minimum Defined Benefit with Possible Higher Benefit

Easier to Administer

Complements the SIMPLE Plan

 

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