[Congressional Record Volume 142, Number 74 (Thursday, May 23, 1996)]
[Senate]
[Pages S5564-S5565]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




 REPORT OF PROPOSED LEGISLATION ENTITLED ``THE RETIREMENT SAVINGS AND 
           SECURITY ACT''--MESSAGE FROM THE PRESIDENT--PM 150

  The PRESIDING OFFICER laid before the Senate the following message 
from the President of the United States, together with an accompanying 
report; which was referred to the Committee on Finance.

To the Congress of the United States:
  I am pleased to transmit today for the consideration of the Congress 
the ``Retirement Savings and Security Act.'' This legislation is 
designed to empower all Americans to save for their retirement by 
expanding pension coverage, increasing portability, and enhancing 
security. By using both employer and individual tax-advantaged 
retirement savings programs, Americans can benefit from the 
opportunities of our changing economy while assuring themselves and 
their families greater security for the future. A general explanation 
of the Act accompanies this transmittal.
  Today, over 58 million American public and private sector workers are 
covered by employer-sponsored pension or retirement savings plans. 
Millions more have been able to save through Individual Retirement 
Accounts (IRAs). The Retirement Savings and Security Act would help 
expand pensions to the over 51 million American

[[Page S5565]]

private-sector workers--including over three-quarters of the workers in 
small businesses--who are not covered by an employer-sponsored pension 
or retirement savings program and need both the opportunity and 
encouragement to start saving. Women particularly need this expanded 
coverage: fewer than one-third of all women retirees who are 55 or 
older receive pension benefits, compared with 55 percent of male 
retirees.
  The Act would also help the many workers who participate in pension 
plans to continue to save when they change jobs. It would reassure all 
workers who save through employer-sponsored plans that the money they 
have saved, as well as that put aside by employers on their behalf, 
will be there when they need it.
  The Retirement Savings and Security Act would:
  --Establish a simple new small business 401(k)-type plan--the 
    National Employee Savings Trust (NEST)--and simplify complex 
    pension laws. The NEST is specifically designed to ensure 
    participation by low- and moderate-wage workers, who will be able 
    to save up to $5,000 per year tax-deferred, plus receive employer 
    contributions toward retirement. The Act would encourage employers 
    of all sizes to cover employees under retirement plans, and it 
    would enable employers to put more money into benefits and less 
    into paying lawyers, accountants, consultants, and actuaries.
  --Increase the ability of workers to save for retirement from their 
    first day on the job by removing barriers to pension portability. 
    In particular, employers would be encouraged no longer to require a 
    1-year wait before employees can contribute to their pension plans. 
    The Federal Government would set the example for other employers by 
    allowing its new employees to begin saving through the Thrift 
    Savings Plan when they are hired, rather than having to wait up to 
    a year. In addition, the Act would reduce from 10 to 5 years the 
    time those participating in multiemployer plans--union plans where 
    workers move from job to job--must work to receive vested benefits. 
    It would also help ensure that returning veterans retain pension 
    benefits and that workers receive their retirement savings even 
    when a previous employer is no longer in existence.
  --Expand eligibility for tax-deductible IRAs to 20 million more 
    families. In addition, the Act would encourage savings by making 
    the use of IRAs more flexible by allowing penalty-free withdrawals 
    for education and training, purchase of a first home, catastrophic 
    medical expenses, and long-term unemployment. It would also provide 
    an additional IRA option that provides tax-free distributions 
    instead of tax-deductible contributions.
  --Enhance pension security by protecting the savings of millions of 
    State and local workers from their employer's bankruptcy, as 
    happened in Orange County, California. The Act would (1) require 
    prompt reporting by plan administrators and accountants of any 
    serious and egregious misuse of funds; (2) double the guaranteed 
    benefit for participants in multiemployer plans in the unlikely 
    event such a plan becomes insolvent; and (3) enhance benefits of a 
    surviving spouse and dependents under the Civil Service Retirement 
    System and the Railroad Retirement System.
  --Ensure that pension raiding, such as that which drained $20 billion 
    out of retirement funds in the 1980s, never happens again--by 
    retaining the strong current laws preventing such abuses and by 
    requiring periodic reports on reversions by the Secretary of Labor.
  Many of the provisions of the Retirement Savings and Security Act are 
new. In particular, provisions facilitating saving from the first day 
on the job, in both the private sector and the Federal Government; the 
doubling of the multi-employer guarantee; and improving benefits for 
surviving spouses and dependents of participants in the Civil Service 
Retirement System and the Railroad Retirement System deserve special 
consideration by the Congress. In addition, many of the provisions and 
concepts in this Act have been previously proposed by this 
Administration and have broad bipartisan support.
  American workers deserve pension security--as well as a decent wage, 
lifelong access to high quality education and training, and health 
security--to take advantage of the opportunities of our growing 
economy.
  I urge the prompt and favorable consideration of this legislative 
proposal by the Congress.
                                                  William J. Clinton.  
  The White House, May 23, 1996.

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