Removing red tape

For as long as I’ve served in the Arkansas Legislature, I’ve taken pride in our state’s reputation for tackling difficult challenges through a conservative lens. Whether the issue is strengthening retirement security or lowering prescription drug costs, Arkansas has shown that our policymakers take initiative to solve problems and find solutions that work for our families, businesses, and taxpayers.

That is why I am eager to see a federal proposal that reflects the same kind of common-sense, fiscally disciplined approach that Arkansas has embraced for years. Senator Tim Scott, a Republican Senator from South Carolina, introduced the Strengthening Benefit Plans Act of 2025, which is exactly the kind of reform Washington needs: a conservative, pro-worker, pro-taxpayer idea that strengthens retirement plans, lowers health costs for employees, and raises federal revenue without raising taxes.

Across the country, employers who have responsibly managed their benefit plans often find themselves with large surpluses in their employees’ pension accounts. These accounts were created to secure pension benefits, and many companies funded them generously.

Today, some of these accounts are not just modestly overfunded; they contain far more money than is needed to meet current and future retiree obligations. In some cases, these accounts hold 175% of the required amount. Yet, employers are prohibited under federal law from using a single dollar of that excess to help workers with rising health care costs. As costs continue to climb, and as businesses strive to maintain high-quality coverage, these outdated regulations prevent private-sector dollars from being used where they are needed most.

This proposed policy would allow employers, under strict safeguards, to use surplus retiree health funds to support other employee health benefits, including lowering premiums for active workers. Companies could only use funds above what is needed to fully meet retiree obligations.

The money would be used solely for employee benefit costs and not for executive compensation or corporate dividends. The proposal frees up dollars that employers have already set aside and already deducted, allowing them to put those dollars back to work for the employees who earned them.

This reform also strengthens the federal government’s balance sheet. When companies use surplus retiree health assets to pay for current employee benefits, they voluntarily give up the tax deduction they would normally claim. That means the federal government collects more revenue without raising taxes on families or businesses. Congress has used this same mechanism before to raise billions of dollars in a responsible way, and it has proven to be a reliable tool for improving federal finances without burdening taxpayers.

We should not be penalizing the companies that have kept their promises to workers and retirees. Yet federal red tape prevents these employers from using their excess funds to help lower today’s health costs. Senator Scott’s proposal lifts that barrier while preserving every protection retirees currently enjoy.

In Arkansas, we believe in responsible stewardship of taxpayer dollars. Senator John Boozman and Senator Tom Cotton share that same approach in Washington and have been advocates for protecting retirees, cutting through unnecessary federal red tape, and keeping costs low for working families. They have never hesitated to stand up for Arkansas values or put the needs of their constituents first, and I have every confidence they will continue to be forceful advocates for reforms like this one.

Washington needs to embrace this kind of common-sense reform. It reflects the values Arkansas has championed for years and offers a smart way to help workers, retirees, and employers alike. As Congress searches for bipartisan ideas that strengthen the economy and reduce costs for Americans, this proposal deserves to be at the top of the list. 

Editor’s note: Sen. Bart Hester, R-Cave Springs, is President Pro Tempore of the Arkansas State Senate. The opinions expressed are those of the author.