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WASHINGTON-Employers would be barred as of 2004 from integrating or reducing retirees' pensions by the Social Security benefits they receive, according to legislation introduced this month by Sen. Carol Moseley-Braun and other Democratic senators.
Eliminating integration, which employers say they now use so lower-wage employees' combined Social Security and pension benefits do not exceed their pre-retirement income, is necessary to preserve the size of pension benefits, said Sen. Moseley-Braun, D-Ill.
Another provision would amend certain Internal Revenue Service pension non-discrimination tests that affect employers that operate separate lines of business. Under those tests, the percentage of non-highly compensated employees covered by a pension plan in a division has to be at least 70% of the percentage of the division's highly compensated employees covered by the plan. Sen. Moseley-Braun's measure, though, would require all employees within a division to be covered by a pension plan.