The voice vote came after the CSX railroad executive met with Democratic Sens. Tom Harkin of Iowa and Richard Durbin of Illinois to come to an agreement on a controversial treasury position on pension systems that the senators said penalizes older workers.
Snow’s approval means that he can start Monday when the president submits his new budget to Congress, which includes a new $674 billion economic stimulus package. In a statement, the president said Snow would “work with me to strengthen economic growth and create jobs so that everyone who seeks work can find work.”
Sens. Harkin and Durbin said Snow had agreed to reconsider a proposed regulation that would protect companies from age-discrimination suits resulting from the conversion of their traditional defined-benefit pension plans to so-called “cash-balance” plans.
Defined-benefit plans pay a fixed monthly amount based on an employee’s final salary and years of service. Cash-balance plans traditionally pay out a percentage of an employee’s annual salary in a lump sum or as an annuity when he or she leaves employment. Unlike a 401(k) plan, workers neither own the accounts nor make investment decisions.
Many older employees at companies that switched retirement plan strategies found their benefits decreased as a result.
Snow assured the senators that, as a “private citizen,” he favored protecting older workers’ pensions, but he did not commit to changing the Treasury Department position, the Wall Street Journal reported.
Sen. Durbin said he was satisfied with Snow’s assurances because, as a CSX executive, Snow decided to give workers the choice of which pension plan to use.
During his confirmation hearing before the Senate Finance Committee, the 63-year-old Snow defended his multi-million dollar executive pay package, saying such compensation programs are vital tools for recruiting top talent. Recent legislation, such as last year’s corporate-management-reform law bans loans from corporations to their executives, might have prevented CSX’s board of directors from extending a large loan guarantee to Snow in 2000.
Snow also praised the president’s economic stimulus plan, which does away with a tax on stock dividends.
“I believe that President Bush’s recent economic growth proposal moves the tax system in the right direction and the U.S. economy as well,” Snow said. “It will create jobs. It will spur investment. It is an investment in the American people and their future.”