WASHINGTON -- Despite a House subcommittee's approval of a plan to continue federal deposit insurance for public pensions, state and local government officials say the insurance system needs to be further refined before municipalities are treated fairly.

As part of an omnibus financial restructuring bill moving through Congress, the provision for public pension plans, known more commonly as 457 plans, was approved 22 to 14 in mid-March by the House Banking Committee's financial institutions subcommittee, even though there is a general sentiment among panel members that the scope of deposit insurance should be scaled back.

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