Sen. Orin Hatch introduced his Secure Annuities for Employee (SAFE) Retirement Act of 2013 as a way to overhaul public and private pension plans. The legislation would allow states to turn over pension plans and the ensuing tax benefits from local governments to insurance companies using fixed-annuity contracts. It also would shift ERISA oversight from the Department of Labor to the Treasury Department.The bill, which was introduced into committee, proposes a three-pronged approach to pension reform:

Development of a new public pension plan: the SAFE Retirement Plan, a state-regulated, fixed annuity product. Hatch described this as a market-based, fixed annuity solution with a consumer safety net. It would not be subject to federal taxes and would receive only minimal involvement from the feds. It would be voluntary.
It would create a separate private plan, the Starter 401(k), a retirement savings plan allowing workers to save $8,000 annually. The Starter 401(k) would allow account holders to save more than in a traditional IRA but wouldn't require the employer to shoulder the administrative burdens of a traditional 401(k).
Remove Department of Labor oversight of investment products under ERISA and move jurisdiction of fiduciary rules to the Treasury Department. This provision is Hatch's response to what he considers overreaching by the DOL in issuing a new, tougher fiduciary standard.

Sen. Tom Harkin, D-Iowa, unveiled legislation that would help tackle the retirement crisis in America and shore up the private pension system.

Instant Insights /

Stormy skies ahead: why the retirement crisis seems unfixable – and getting worse

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