[Congressional Record Volume 143, Number 68 (Wednesday, May 21, 1997)]
[House]
[Pages H3082-H3088]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




         SAVINGS ARE VITAL TO EVERYONE'S RETIREMENT ACT OF 1997

  Mr. FAWELL. Mr. Speaker, I move to suspend the rules and pass the 
bill (H.R. 1377) to amend title I of the Employee Retirement Income 
Security Act of 1974 to encourage retirement income savings, as 
amended.
  The Clerk read as follows:

                               H.R. 1377

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Savings Are Vital to 
     Everyone's Retirement Act of 1997''.

     SEC. 2. FINDINGS AND PURPOSE.

       (a) Findings.--The Congress finds as follows:
       (1) The impending retirement of the baby boom generation 
     will severely strain our already overburdened entitlement 
     system, necessitating increased reliance on pension and other 
     personal savings.
       (2) Studies have found that less than a third of Americans 
     have even tried to calculate how much they will need to have 
     saved by retirement, and that less than 20 percent are very 
     confident they will have enough money to live comfortably 
     throughout their retirement.
       (3) A leading obstacle to expanding retirement savings is 
     the simple fact that far too many Americans--particularly the 
     young--are either unaware of, or without the knowledge and 
     resources necessary to take advantage of, the extensive 
     benefits offered by our retirement savings system.
       (b) Purpose.--It is the purpose of this Act--
       (1) to advance the public's knowledge and understanding of 
     retirement savings and its critical importance to the future 
     well-being of American workers and their families;
       (2) to provide for a periodic, bipartisan national 
     retirement savings summit in conjunction with the White House 
     to elevate the issue of savings to national prominence; and
       (3) to initiate the development of a broad-based, public 
     education program to encourage and enhance individual 
     commitment to a personal retirement savings strategy.

     SEC. 3. OUTREACH BY THE DEPARTMENT OF LABOR.

       (a) In General.--Part 5 of subtitle B of title I of the 
     Employee Retirement Income Security Act of 1974 (29 U.S.C. 
     1131 et seq.) is amended by adding at the end the following 
     new section:


            ``outreach to promote retirement income savings

       ``Sec. 516. (a) In General.--The Secretary shall maintain 
     an ongoing program of outreach to the public designed to 
     effectively promote retirement income savings by the public.
       ``(b) Methods.--The Secretary shall carry out the 
     requirements of subsection (a) by means which shall ensure 
     effective communication to the public, including publication 
     of public service announcements, public meetings, creation of 
     educational materials, and establishment of a site on the 
     Internet.
       ``(c) Information To Be Disseminated.--The information to 
     be disseminated by the Secretary as part of the program of 
     outreach required under subsection (a) shall include the 
     following:
       ``(1) a description of the vehicles currently available to 
     individuals and employers for creating and maintaining 
     retirement income savings, specifically including information 
     explaining to employers, in simple terms, how to establish 
     each of the different retirement savings vehicles for their 
     workers, and
       ``(2) information regarding matters relevant to 
     establishing retirement income savings, such as--
       ``(A) the forms of retirement income savings,
       ``(B) the concept of compound interest,
       ``(C) the importance of commencing savings early in life,
       ``(D) savings principles,
       ``(E) the importance of prudence and diversification in 
     investing,
       ``(F) the importance of the timing of investments, and
       ``(G) the impact on retirement savings of life's 
     uncertainties, such as living beyond one's life expectancy.
       ``(d) Establishment of Site on the Internet.--The Secretary 
     shall establish a permanent site on the Internet concerning 
     retirement income savings. The site shall contain at least 
     the following information:
       ``(1) a means for individuals to calculate their estimated 
     retirement savings needs, based on their retirement income 
     goal as a percentage of their preretirement income;
       ``(2) a description in simple terms of the common types of 
     retirement income savings arrangements available to both 
     individuals and employers (specifically including small 
     employers), including information on the amount of money that 
     can be placed into a given vehicle, the tax treatment of the 
     money, the amount of accumulation possible through different 
     typical investment options and interest rate projections, and 
     a directory of resources of more descriptive information;
       ``(3) materials explaining to employers in simple terms how 
     to establish and maintain different retirement savings 
     arrangements for their workers and what the basic legal 
     requirements are under this Act and the Internal Revenue Code 
     of 1986;
       ``(4) copies of all educational materials developed by the 
     Department of Labor, and by other Federal agencies in 
     consultation with such Department, to promote retirement 
     income savings by workers and employers; and
       ``(5) links to other sites maintained on the Internet by 
     governmental agencies and nonprofit organizations that 
     provide additional detail on retirement income savings 
     arrangements and related topics on savings or investing.
       ``(e) Coordination.--The Secretary shall coordinate the 
     outreach program under this section with similar efforts 
     undertaken by other public and private entities.''.
       (b) Conforming Amendment.--The table of contents in section 
     1 of such Act is amended by inserting after the item relating 
     to section 514 the following new items:
``Sec. 515. Delinquent contributions.
``Sec. 516. Outreach to promote retirement income savings.''.

     SEC. 4. NATIONAL SUMMIT ON RETIREMENT SAVINGS.

       (a) In General.--Part 5 of subtitle B of title I of the 
     Employee Retirement Income Security Act of 1974 (as amended 
     by section 3 of this Act) is amended further by adding at the 
     end the following new section:


                ``national summit on retirement savings

       ``Sec. 517. (a) Authority To Call Summit.--Not later than 
     June 1, 1998, the President shall convene a National Summit 
     on Retirement Income Savings at the White House, to be co-
     hosted by the President and the Speaker and the Minority 
     Leader of the House of Representatives and the Majority 
     Leader and Minority Leader of the Senate. Such a National 
     Summit shall be convened thereafter in 2001 and 2005 on or 
     after September 1 of each year involved. Such a National 
     Summit shall--
       ``(1) advance the public's knowledge and understanding of 
     retirement savings and its critical importance to the future 
     well-being of American workers and their families;
       ``(2) facilitate the development of a broad-based, public 
     education program to encourage and enhance individual 
     commitment to a personal retirement savings strategy;
       ``(3) develop recommendations for additional research, 
     reforms in public policy, and actions in the field of 
     retirement income savings; and

[[Page H3083]]

       ``(4) disseminate the report of, and information obtained 
     by, the National Summit and exhibit materials and works of 
     the National Summit.
       ``(b) Planning and Direction.--The National Summit shall be 
     planned and conducted under the direction of the Secretary, 
     in consultation with, and with the assistance of, the heads 
     of such other Federal departments and agencies as the 
     President may designate. Such assistance may include the 
     assignment of personnel. The Secretary shall, in planning and 
     conducting the National Summit, consult with the 
     congressional leaders specified in subsection (e)(2). The 
     Secretary shall also, in carrying out the Secretary's duties 
     under this subsection, consult and coordinate with at least 
     one organization made up of private sector businesses and 
     associations partnered with Government entities to promote 
     long-term financial security in retirement through savings 
     (including for 1998, and thereafter as the Secretary may deem 
     appropriate, the American Savings Education Council).
       ``(c) Purpose of National Summit.--The purpose of the 
     National Summit shall be--
       ``(1) to increase the public awareness of the value of 
     personal savings for retirement;
       ``(2) to advance the public's knowledge and understanding 
     of retirement savings and its critical importance to the 
     future well-being of American workers and their families;
       ``(3) to facilitate the development of a broad-based, 
     public education program to encourage and enhance individual 
     commitment to a personal retirement savings strategy;
       ``(4) to identify the problems which hinder workers from 
     setting aside adequate savings for retirement;
       ``(5) to identify the barriers which impede employers, 
     especially small employers, from assisting workers in 
     accumulating retirement savings;
       ``(6) to examine the impact and effectiveness of individual 
     employers to promote personal savings for retirement among 
     their workers and to promote participation in company savings 
     options;
       ``(7) to examine the impact and effectiveness of government 
     programs at the Federal, State, and local levels to promote 
     retirement income savings;
       ``(8) to develop such specific and comprehensive 
     recommendations for the legislative and executive branches of 
     the Government and for private sector action as may be 
     appropriate for promoting retirement income savings among 
     American workers; and
       ``(9) to develop recommendations for the coordination of 
     Federal, State, and local policies among the Federal, State, 
     and local levels of government and for the coordination of 
     such policies (including any solutions for Federal, State, 
     and local needs devised at the Federal, State, and local 
     levels) with the efforts of the private sector to meet such 
     needs, and to identify the appropriate authority and entities 
     to implement such recommendations.
       ``(d) Scope of National Summit.--The scope of the National 
     Summit shall consist of issues relating to individual and 
     employer-based retirement savings and shall not include 
     issues relating to the old-age, survivors, and disability 
     insurance program under title II of the Social Security Act.
       ``(e) National Summit Participants.--
       ``(1) In general.--To carry out the purposes of the 
     National Summit, the National Summit shall bring together--
       ``(A) professionals and other individuals working in the 
     fields of employee benefits and retirement savings;
       ``(B) Members of Congress and officials in the executive 
     branch;
       ``(C) representatives of State and local governments;
       ``(D) representatives of private sector institutions, 
     including individual employers, concerned about promoting the 
     issue of retirement savings and facilitating savings among 
     American workers; and
       ``(E) representatives of the general public.
       ``(2) Statutorily required participation.--The participants 
     in the National Summit shall include the following 
     individuals or their designees:
       ``(A) the Speaker and the Minority Leader of the House of 
     Representatives;
       ``(B) the Majority Leader and the Minority Leader of the 
     Senate;
       ``(C) the Chairman and ranking Member of the Committee on 
     Education and the Workforce of the House of Representatives;
       ``(D) the Chairman and ranking Member of the Committee on 
     Labor and Human Resources of the Senate;
       ``(E) the Chairman and ranking Member of the Special 
     Committee on Aging of the Senate; and
       ``(F) the parties referred to in subsection (b).
       ``(3) Additional participants.--There shall be not more 
     than 400 additional participants. Of such additional 
     participants--
       ``(A) one-fourth shall be appointed by the Speaker of the 
     House of Representatives;
       ``(B) one-fourth shall be appointed by the Minority Leader 
     of the House of Representatives;
       ``(C) one-fourth shall be appointed by the Majority Leader 
     of the Senate; and
       ``(D) one-fourth shall be appointed by the Minority Leader 
     of the Senate.

     Such remaining participants shall be selected without regard 
     to political affiliation or past partisan activity and shall 
     be representative of the diversity of thought in the fields 
     of employee benefits and retirement income savings.
       ``(4) Presiding officers.--The National Summit shall be 
     presided over equally by representatives of the executive and 
     legislative branches.
       ``(f) National Summit Administration.--
       ``(1) Administration.--In administering this section, the 
     Secretary shall--
       ``(A) request the cooperation and assistance of such other 
     Federal departments and agencies and other parties referred 
     to in subsection (b) as may be appropriate in the carrying 
     out of this section;
       ``(B) furnish all reasonable assistance, including 
     financial assistance, to State agencies, area agencies, and 
     other appropriate organizations to enable them to organize 
     and conduct conferences in conjunction with the National 
     Summit;
       ``(C) make available for public comment a proposed agenda 
     for the National Summit that reflects to the greatest extent 
     possible the purposes for the National Summit set out in this 
     section;
       ``(D) prepare and make available background materials for 
     the use of participants in the National Summit that the 
     Secretary considers necessary; and
       ``(E) appoint and fix the pay of such additional personnel 
     as may be necessary to carry out the provisions of this 
     section without regard to provisions of title 5, United 
     States Code, governing appointments in the competitive 
     service, and without regard to chapter 51 and subchapter III 
     of chapter 53 of such title relating to classification and 
     General Schedule pay rates.
       ``(2) Duties.--The Secretary shall, in carrying out the 
     responsibilities and functions of the Secretary under this 
     section, and as part of the National Summit, ensure that--
       ``(A) the National Summit shall be conducted in a manner 
     that ensures broad participation of Federal, State, and local 
     agencies and private organizations, professionals, and others 
     involved in retirement income savings and provides a strong 
     basis for assistance to be provided under paragraph (1)(B);
       ``(B) the agenda prepared under paragraph (1)(C) for the 
     National Summit is published in the Federal Register; and
       ``(C) the personnel appointed under paragraph (1)(E) shall 
     be fairly balanced in terms of points of views represented 
     and shall be appointed without regard to political 
     affiliation or previous partisan activities.
       ``(g) Report.--The Secretary shall prepare a report 
     describing the activities of the National Summit and shall 
     submit the report to the President, the Speaker and Minority 
     Leader of the House of Representatives, the Majority and 
     Minority Leaders of the Senate, and the chief executive 
     officers of the States not later than 90 days after the date 
     on which the National Summit is adjourned.
       ``(h) Definition.--For purposes of this section, the term 
     `State' means a State, the District of Columbia, the 
     Commonwealth of Puerto Rico, the Commonwealth of the Northern 
     Mariana Islands, Guam, the Virgin Islands, American Samoa, 
     and any other territory or possession of the United States.
       ``(i) Authorization of Appropriations.--
       ``(1) In general.--There is authorized to be appropriated 
     for fiscal years beginning on or after October 1, 1997, such 
     sums as are necessary to carry out this section.
       ``(2) Reliance on private contributions.--The Secretary may 
     accept private contributions, in the form of money, supplies, 
     or services, to defray the costs of the National Summit. The 
     Secretary shall ensure, to the extent practicable, that at 
     least one-half of the funds available to the Secretary for 
     each fiscal year to carry out the provisions of this section 
     consist of such private contributions.
       ``(j) Contracts.--The Secretary may enter into contracts to 
     carry out the Secretary's responsibilities under this 
     section, but only to the extent, or in such amounts, as are 
     provided in advance in appropriations Acts.''.
       (b) Conforming Amendment.--The table of contents in section 
     1 of such Act (as amended by section 3 of this Act) is 
     amended further by inserting after the item relating to 
     section 516 the following new item:

``Sec. 517. National Summit on Retirement Savings.''.
       (c) Authorization of Appropriations for Fiscal Year 1998.--
     Notwithstanding subsection (i) of section 517 of the Employee 
     Retirement Income Security Act of 1974 (added by this 
     section), the amount authorized to be appropriated for fiscal 
     year 1998 to carry out such section is an amount equal to 
     $1,000,000.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Illinois [Mr. Fawell] and the gentleman from New Jersey [Mr. Payne] 
each will control 20 minutes.
  The Chair recognizes the gentleman from Illinois [Mr. Fawell].
  Mr. FAWELL. Mr. Speaker, I yield myself 5 minutes.
  (Mr. FAWELL asked and was given permission to revise and extend his 
remarks.)
  Mr. FAWELL. Mr. Speaker, I am very pleased to join with my colleague, 
the gentleman from New Jersey [Mr. Payne], the ranking Democrat on the 
Subcommittee on Employer-Employee Relations, as well as many other 
Democrats and Republicans from across the political spectrum in 
sponsoring the SAVER Act.
  H.R. 1377 represents bipartisan legislation addressing a critical 
national

[[Page H3084]]

problem, the lack of individual retirement savings. I am also pleased 
to say the SAVER Act has been introduced on the other side of the Hill 
by Senators Charles Grassley and John Breaux, the chairman and ranking 
member of the Special Committee on Aging.
  In addition, the SAVER Act is endorsed by a diverse group of 
organizations including the U.S. Chamber of Commerce, the Association 
of Private Pension and Welfare Plans, the Financial Executives 
Institute, the National Association of Manufacturers, the American 
Association of Retired Persons, the American Council of Life Insurance, 
the Profit Sharing 401(k) Council of America, the Investment Company 
Institute, and the Society for Human Resources Management.
  America faces a ticking demographic time bomb that requires increased 
retirement savings. The Savings Are Vital to Everyone's Retirement Act, 
or the SAVER Act, as we refer to it, is a first step in defusing that 
retirement time bomb. The SAVER Act initiates a broad-based educational 
program to educate America's employers, workers, and the public in 
general about retirement savings and convenes a national summit on 
retirement savings.
  Through this bill, we facilitate a broad-based public-private 
partnership to educate the public on the serious and underreported 
national problem. Workers need to know the importance of saving for the 
future and of saving as early in life as possible.
  As a survey released this year by the Employee Benefit Research 
Institute reveals, there is much work to do. Less than a third of 
Americans have even tried to calculate how much they need to have saved 
by retirement. Furthermore, less than 20 percent are very confident 
that they will have enough money to live comfortably through their 
retirement. The lack of adequate retirement savings will only become a 
more pressing problem as the baby boomers begin to retire in about a 
decade. Far too few Americans, particularly the young, have either the 
knowledge or the resources necessary to take advantage of the extensive 
benefits offered by our retirement savings system. The virtue of saving 
appears to have escaped most Americans while the ``just charge it'' 
mentality is thriving, according to the research group, Public Action.
  The same EBRI study, that is the Employee Benefit Research Institute, 
found that, while only a quarter of workers expressed confidence in 
their ability to map out a retirement savings strategy, an encouraging 
50 percent said that they would stick to a plan if they had one. We 
have to find ways to get the information and skills out to workers to 
harness this latent energy.
  The SAVER Act directs the Department of Labor to maintain an ongoing 
program of education and outreach to the public through, first, public 
service announcements, second, public meetings, third, creation of 
educational materials, and, fourth, establishment of a site on the 
Internet. The information will include a means for individuals to 
calculate their estimated retirement savings needs, a plain English 
description of the common types of retirement savings arrangements 
currently available to both individuals and employers, and an 
explanation for employers in simple terms of how to establish different 
retirement savings arrangements for their workers.
  The SAVER Act also convenes a national summit on retirement savings 
at the White House, cohosted by the executive and the legislative 
branches to be held by June 1, 1998, and then again in the years 2001 
and 2005. The national summit would advance the public's knowledge and 
understanding of retirement savings and facilitate the development of a 
broad-based public education program. It would develop specific 
recommendations for legislative and executive and private sector 
actions to promote retirement savings among American workers.
  The national summit would bring together experts in the fields of 
employee benefits and retirement savings. Key leaders of Government and 
interested parties from the private sector and general public; the 
delegates would be selected equally by the majority and minority 
leaders of the two Houses of Congress and would represent the diversity 
of thought in the field without regard to any political affiliation. 
The national summit would receive substantial funding from private 
sector contributions.
  I hope, therefore, that the SAVER Act can be a very important first 
step in a truly bipartisan effort to reverse the long course of neglect 
on this vital issue and help American workers better prepare for a 
comfortable and secure retirement. I urge my colleagues to vote for 
passage of the SAVER Act and to vote to help to refuse the retirement 
time bomb to which I made reference.
  Again, I thank the gentleman from New Jersey [Mr. Payne] for his 
leadership and his patient guidance of this legislation because without 
him, we would not be here today.
  Mr. Speaker, I reserve the balance of my time.
  Mr. PAYNE. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I think the SAVER Act will provide a big first step 
toward greater awareness about retirement security for all Americans. I 
want to commend the gentleman from Illinois [Mr. Fawell] for his 
efforts to bring attention to this very important issue that affects 
millions of Americans. The retirement clock is running out for millions 
of Americans and their families. After a lifetime of hard work and 
contributing to and building our society, millions of older Americans 
have retired and are not prepared for it.

                              {time}  1100

  They cannot afford to pay their bills.
  While we have worked closely with the administration to make gains in 
strengthening protection for plan participants in the last 4 years, we 
still have miles to go in assuring retirement security for the American 
worker. Half of all older Americans have incomes of less than $11,300. 
This is because their incomes are drawn primarily from Social Security, 
which, on an average, pays $8,460 to retired workers. That is less than 
today's minimum wage. Very little of their income comes from individual 
savings.
  A very alarming picture painted by statistics is that many of the 
people we need to reach out for are women and minorities. As my 
colleagues know, there is a direct correlation between pension adequacy 
and the wages that workers receive. This is because many employers base 
their pension benefits on workers' wages. This is true with respect to 
the defined contributions and defined benefit plans, including 401(k) 
plans.
  A very disturbing image forms when we begin to think about the 
retirement security of low-wage workers, particularly women and 
minorities. Many of these workers will never receive a pension. We know 
that less than half of all working women are covered by a pension. 
Those who are fortunate enough to be covered by a plan can expect to 
receive lower benefits in retirement because their wages were lower 
while they were working.
  A recent study noted an alarming trend in private pension coverage 
among African-Americans and Latino-Americans. This study suggests that 
many minority workers will become strictly dependent on Social Security 
and have a shrinking chance to enjoy a financially comfortable 
retirement.
  Moreover, the report shows that the percentage of blacks covered by 
private pensions of all types plummeted from 45.1 percent in 1979 to 
33.8 percent in 1993, while coverage of Latinos fell from 37.7 to 24.6 
percent during the same period.
  I am hopeful that the SAVER Act will be successful in reaching these 
workers. Many of them live in my district, but they just do not live in 
my district, they live in all our hometowns. They may be our friends or 
members of our families. Millions of people will not have any 
significant retirement income beyond Social Security, which makes the 
Federal program even more critical, especially at a time when its 
fiscal future is under tremendous scrutiny.
  With the baby boom generation on the eve of retirement, this 
statistical snapshot of the next generation of retirees is fueling the 
current debate about Social Security. I believe the provisions in the 
SAVER Act will provide more opportunities to better educate and prepare 
Americans in their retirement. Today, Mr. Speaker, I hope that this is 
the beginning of developing real solutions that affect real people.
  Mr. Speaker, I reserve the balance of my time.

[[Page H3085]]

  Mr. FAWELL. Mr. Speaker, I yield 2 minutes to the gentleman from 
Pennsylvania [Mr. Goodling], the chairman of the Committee on Education 
and the Workforce.
  Mr. GOODLING. Mr. Speaker, I thank the gentleman for yielding me this 
time and I want to congratulate the gentleman from Illinois [Mr. 
Fawell], and the gentleman from New Jersey [Mr. Payne], for bringing 
this legislation before us today.
  We are here to address in a bipartisan fashion the real demographic 
time bomb that faces the American work force. Workers are not saving 
adequately for their retirement, and this problem will only become more 
profound as the baby boom generation continues to age.
  It does not take a mathematician to recognize that in the future 
retiring Americans will have to rely less on Social Security and more 
on pensions and other personal saving. Diffusing the retirement time 
bomb requires immediate action. Educating American workers in this is 
the critical first step.
  The Savings Are Vital to Everyone's Retirement Act of 1997, the SAVER 
Act, is that first step. The SAVER Act initiates projects to educate 
American workers about retirement savings and convenes a national 
summit on retirement savings.
  I am pleased to join with my colleagues from across the aisle, both 
in this body and in the Senate, to support this important initiative. 
Far too few workers, especially the young, understand the importance of 
saving for retirement.
  And others of us understand how confusing it can be to end at 3 a.m. 
and begin immediately thereafter.
  Many small businesses are confused as to how to set up some of the 
new retirement saving vehicles created by Congress or do they know how 
to go about encouraging their workers to take advantage of them.
  The SAVER Act creates a statutory mandate for the Department of Labor 
to help inform American workers about retirement savings to give them 
the tools they need to take advantage of the many existing benefits of 
our retirement system.
  The SAVER Act also hopes to focus greater public awareness on the 
lack of retirement savings by convening a national summit at the White 
House. The summit would be a bipartisan undertaking of both the 
executive and legislative branches, bringing together employee benefit 
experts throughout the country.
  Mr. PAYNE. Mr. Speaker, I yield 2 minutes to the gentleman from 
Connecticut, [Mr. Gejdenson].
  Mr. GEJDENSON. Mr. Speaker, I want to commend the sponsors of the 
bill. It is an important step, but we could do a lot more.
  There are a number of pieces of legislation that are in the hopper at 
the moment that could take action to deal with people's situations in 
dealing with pensions. H.R. 1130, the Retirement Security Act, already 
has 108 sponsors.
  We know what the problems are in pensions. Women particularly, 
because they leave for childbearing reasons and others, often sever 
their work in a way that precludes them from getting a pension.
  We need to make vesting take less time. We have to figure out and put 
forth proposals that will get the majority of this Congress, because we 
know how to do it, we just need to find a majority. The majority in 
this Congress are Republicans, and we need them to step forward to help 
us with legislation that will guarantee that women will have an equal 
shot at pensions, and poor working people as well will have an equal 
shot at pensions; that corporations cannot raid the funds and leave the 
pensions underfunded in the final days of people's lives.
  When we have the wealthiest country in the world, with 51 million 
people without pensions, it is clear we are not doing enough. Now, we 
have done some things through the years. We have prevented some 
movement of assets. We have done some other things. But there is a lot 
more to do here.
  Women in particular are disadvantaged by this present system. In the 
next generation it will work less well than our generation. Our parents 
held one job in a lifetime; most of us will have three or four; the 
next generation could have as many as eight. It will be impossible for 
people to vest in pension systems.
  This Congress needs to do more than just get information out; it 
needs to change the laws to make it easier for corporations to set up 
401(k)'s and other kinds of retirement benefits. It needs to move 
forward to change the vesting period so that people, particularly 
women, can vest in their pensions. We have to move forward and make 
sure that people can keep their pensions even if they work only several 
years at a job.
  Those are the things we ought to be doing and can do if we get some 
support from the Republican side of the aisle.
  Mr. FAWELL. Mr. Speaker, I yield 3 minutes to the gentleman from 
Arizona, [Mr. Kolbe].
  Mr. KOLBE. Mr. Speaker, I thank the gentleman for yielding me this 
time, and I rise in support of H.R. 1377, the Savings Are Vital to 
Everyone's Retirement, known as the SAVER Act.
  I applaud the work of my colleagues of the Subcommittee on Employer-
Employee Relations, the gentleman from Illinois, Chairman Fawell, and 
the gentleman from New Jersey, Mr. Payne, the ranking member.
  With this critical piece of legislation we have taken the first step 
in providing the American people with the information they need to have 
to prepare for their retirement years. There is a critical need to look 
at the low level of retirement savings in the United States today. The 
story is dramatic.
  Between 1951 and 1980, the United States' national savings rates was 
fairly stable, ranging from 7 to 10 percent. However, since the 1980's, 
the rate of savings in the United States has dropped to a low of 3 
percent. This number reflects the decline in personal family savings, 
which includes pension accumulations, business savings, and also in the 
level of savings of the Federal Government. The simple truth is, as 
Americans, we are just not saving enough for our retirement.
  Based on the current economic and demographic trends facing Social 
Security, it is unlikely that that program can be sustained in its 
present form without modifying either the benefits or the 
contributions. Growth in the elderly population in the United States, 
already very rapid because of increasing life expectancy and declining 
fertility rates, will accelerate when the baby boom generation reaches 
retirement age in 2010.
  Social Security has been a very successful program over the years, 
but it provides few Americans with adequate retirement income, and it 
is likely to play an even more limited role in the retirement picture 
in the future.
  According to the Department of Labor, the average worker will need 
about 70 percent of his preretirement income to maintain his standard 
of living after retirement, but Social Security will not provide that 
level of retirement income. Social Security pays the average worker 
only about 40 percent of preretirement income and only about 27 percent 
for workers that earn over $60,000 or more.
  Over 2 years ago I became concerned about this and I became involved, 
in an effort to address the long-term viability of the Social Security 
program, by forming the house public pension reform caucus. The caucus 
has begun to explore reform options to address the many economic and 
demographic problems of the Social Security Program. It is the goal of 
the caucus to ensure that future generations, including those of our 
children and grandchildren, are not strapped with a bankrupt system 
prior to their retirement.
  We must encourage Americans to supplement their Social Security 
income with pension plans and personal savings. These investments will 
help individuals plan for a more comfortable retirement. In order to 
encourage individuals to increase their savings and take greater 
responsibility for their futures, workers must be educated about the 
various retirement savings choices and investment strategies regarding 
their retirement future, and that is why I stand here in support of 
H.R. 1377, the SAVER Act.
  This legislation initiates a number of projects to help educate 
American workers about retirement savings options. It creates a 
national summit on retirement savings in conjunction with the White 
House and the private sector. The summit will convene on three 
occasions, in 1998, 2001, and 2005.

[[Page H3086]]

  The SAVER Act also directs the Department of Labor to maintain an 
ongoing program of education and outreach to help workers understand 
these options and prepare wisely for their retirement.
  Mr. Speaker, I urge my colleagues to support this valuable education 
effort and vote ``yes'' for H.R. 1377.
  Mr. FAWELL. Mr. Speaker, may I inquire as to how much time remains on 
this side?
  The SPEAKER pro tempore (Mr. Coble). The gentleman from Illinois [Mr. 
Fawell] has 10 minutes remaining and the gentleman from New Jersey [Mr. 
Payne] has 14 minutes remaining.
  Mr. FAWELL. Mr. Speaker, I yield 2 minutes to the gentleman from 
Delaware [Mr. Castle].
  Mr. CASTLE. Mr. Speaker, I thank the gentleman for yielding me this 
time. I rise today in strong support of H.R. 1377, the Savings Are 
Vital to Everyone's Retirement Act.
  I also want to thank the gentleman from Illinois, [Mr. Fawell], and 
the gentleman from New Jersey, [Mr. Payne], for providing leadership on 
such an important issue for the House to consider and for forwarding 
this timely piece of bipartisan legislation that I am pleased to be an 
original cosponsor of.
  Unfortunately, too many retired Americans today have misjudged their 
retirement savings needs and today's youth are following in their 
footsteps as well. These problems pose a significant risk to the future 
well-being of millions of soon to be retirees as well as the countless 
baby boomers who will retire after the turn of the century.
  Just as the long-term solvency of Social Security remains a vitally 
important issue that must be addressed by Congress very soon, so too 
must we also address the looming crisis in private retirement savings 
by reaching out to all Americans and informing them of this enormous 
problem. If we fail to do so, the impending retirement of the baby 
boomers will severely strain our already overburdened entitlement 
system, necessitating increased reliance on pension and other personal 
savings. The SAVER Act would do just that.
  Studies have shown that less than a third of all Americans have even 
tried to calculate how much they will need to have saved by retirement, 
and that less than 20 percent are very confident that they will have 
enough money to live comfortably throughout their retirement. By 
passing this legislation, we can help advance the public's knowledge 
and understanding of retirement savings and its critical importance to 
the future well-being of American workers, and provide for a periodic 
bipartisan national retirement savings summit, in conjunction with the 
White House, to elevate the issue of savings to national prominence, 
and initiate the development of a broad-based public education program 
to encourage and enhance individual commitment to a personal retirement 
savings strategy.

                              {time}  1115

  Highlighting this national problem is one of the best things this 
Congress can do. Enact the SAVER Act now. The retirement time bomb is 
ticking.
  Mr. PAYNE. Mr. Speaker, I yield as much time as he may consume to the 
gentleman from North Dakota [Mr. Pomeroy].
  Mr. POMEROY. Mr. Speaker, I thank the gentleman from New Jersey [Mr. 
Payne] for yielding.
  Mr. Speaker, I am very proud to rise as an original cosponsor of H.R. 
1377, the SAVER Act, and to join with my colleagues from both sides of 
the aisle in urging the House to pass this important legislation.
  I want to commend specifically the gentleman from Illinois, Chairman 
Fawell, and the gentleman from New Jersey, ranking member Payne, for 
their attention to the critical issue of retirement security and for 
their dedication to crafting bipartisan solutions that will advance the 
goal of economic security in retirement for all Americans.
  Mr. Speaker, statistics demonstrate that our Nation faces an 
impending crisis when it comes to retirement savings. From World War II 
until 1980, personal savings rates as a percent of disposable income in 
this country averaged nearly 8 percent. Yet, in recent years, personal 
savings rates have fallen dramatically, now averaging barely 4 percent, 
half of what it was earlier. People are simply not saving what they 
will need to have a financially secure retirement.
  Indeed, one-third of those close to retirement age have savings of 
less than $10,000. One in six new Social Security recipients has no 
retirement savings whatsoever. The problem is particularly acute for 
modest-income workers. Among the millions in this country with incomes 
of less than $25,000 a year, fully 42 percent report no retirement 
savings. And in the baby-boom generation which is rapidly approaching 
the retirement period, only one in three baby-boomers is on track in 
their savings for a financially secure retirement.
  Mr. Speaker, by focusing on education, the SAVER Act takes an 
important step in turning this retirement crisis around. A key 
ingredient in achieving a secure retirement is knowledge, knowing what 
savings opportunities are out there, knowing how compound interest can 
work for you, knowing how to plan for retirement throughout one's 
career, and knowing some basic investment strategies.
  Too many people simply lack this information, and we must step up the 
education efforts so that all Americans will have the tools to plan and 
save for their own retirement. Retirement education efforts in the 
workplace have proven enormously effective in getting employees to 
participate in their 401(k) and pension plans and in providing them 
with basic information about retirement savings. Yet, more than half of 
all private sector workers do not have access to a retirement plan at 
work, and so they miss out on these educational efforts.
  The SAVER Act addresses this need by involving the Government in a 
broad public-private partnership to educate American workers about 
retirement savings. Specifically, the act directs the Department of 
Labor to maintain an ongoing program of outreach and education about 
retirement planning. It convenes a series of national summits on 
retirement savings at the White House over the next decade. These 
focused and high-profile efforts will help get the message about the 
importance of savings to every American so that retirement information 
no longer depends on the good fortune of having a pension plan at work.
  Today, with our retirement system undergoing profound change, 
education is more important than ever before. For the first time, many 
Americans are now relying on defined-contribution plans such as 
401(k)'s rather than the traditional defined-benefit pension plans for 
their retirement security.
  While 401(k)'s are quite popular with employers and employees alike 
and offer some undeniable advantages, they also involve a substantial 
shift of retirement risk from the employer to the worker. Employees 
must decide what portion of their income to contribute, how to invest 
their contributions, whether to take loans or withdrawals from their 
accounts, and how to use their 401(k) savings wisely over the course of 
their retirement. All this adds up to more risk on the shoulders of 
individual workers, who may or may not be ready to accept this 
additional risk.
  And the risk for those without retirement plans at the workplace, who 
must save for retirement all on their own, are even greater. The 
education about retirement planning and savings authorized by the SAVER 
Act will help individuals manage their new-found retirement 
responsibility.
  Mr. Speaker, it is my hope that the SAVER Act represents a first step 
in what will be an ongoing series of bipartisan efforts to enhance 
retirement secured by expanding pension coverage, increasing pension 
participation, and boosting permanent savings rates.
  While education is critical, it is not the where-all and end-all at 
getting at this problem; it must be paired with efforts to get more 
workers covered by retirement plans and the development of a 
comprehensive national strategy for achieving retirement security.
  Along these lines, I am pleased to have joined with my good friends, 
the gentleman from Illinois, Chairman Fawell, and the gentlewoman from 
Connecticut, Mrs. Nancy Johnson, in introducing legislation that spurs 
pension coverage of small business employees and cuts pension redtape 
for small business.
  Just this past Friday, we introduced H.R. 1656, the Secure Assets for 
Employees Plan Act of 1997, also known as

[[Page H3087]]

SAFE Act. This will allow small businesses to offer simplified defined-
benefit pension plans. SAFE plans will provide all small business 
employees with a secure, fully portable retirement benefit without 
choking small business with complex rules and regulations they simply 
cannot afford.
  Unfortunately, only 24 percent of small business employees today have 
access to a retirement plan at work. We have got to do better than 
that. I look forward to working with Chairman Fawellto advance the SAFE 
Act so that more small businesses can offer pension benefits to their 
workers.
  Mr. Speaker, today I am introducing another piece of legislation 
which I believe will help advance our Nation's retirement policy. This 
bill, the Retirement Savings Commission Act of 1997, will create a 
specific national commission to examine the scope of the retirement 
savings crisis and recommended policies to help improve the economic 
security of retirement workers. The Retirement Savings Commission will 
be the only Federal panel solely charged with exploring pension and 
savings issues that will help us develop the comprehensive national 
strategy on retirement savings that we have so sorely lacked in the 
past.
  We have had Social Security commissions, we have had Medicare 
commissions, but we never looked in a dedicated way at the variety of 
private savings opportunities and assessed whether or not we have a 
coherent national strategy for private retirement savings.
  In conclusion, Mr. Speaker, let me again congratulate the gentleman 
from Illinois [Mr. Fawell] and the gentleman from New Jersey [Mr. 
Payne] for their leadership on this issue and for the excellent bill 
they have crafted in the SAVER Act. I urge all my House colleagues to 
advance the cause of retirement education and support this bill, and I 
look forward to working in the weeks ahead to see that this measure is 
quickly passed by the Senate and signed by the President.
  Mr. FAWELL. Mr. Speaker, I yield 3 minutes to the gentleman from 
Michigan [Mr. Knollenberg].
  Mr. KNOLLENBERG. Mr. Speaker, I thank the gentleman for yielding me 
the time.
  Mr. Speaker, I want to thank the gentleman from Illinois [Mr. Fawell] 
and the gentleman from New Jersey, the ranking member, [Mr. Payne], for 
their leadership in recognizing the importance of preparing for 
retirement. It is not too often that we see such bipartisanship on 
legislation passed out of the Committee on Education and the Workforce. 
This was one of those examples. But it is not a partisan issue, it 
affects everyone, whether you are a Democrat, a Republican, an 
Independent.
  There is a common problem that we have: All of us either live too 
long or we die too soon. And speaking about the former, investing for 
retirement is not easy. It takes discipline; it takes foresight. Too 
often we put off until tomorrow what we should do today. I believe 
Congress has an opportunity to play a major role in educating the 
public about retirement preparation, and that is why I am in strong 
support of the SAVER Act, the so-called Savings Are Vital to Everyone's 
Retirement Act.
  Mr. Speaker, there are several things we know about the current 
status in America. We know that the average retiree can no longer rely 
upon Social Security benefits as their sole means of retirement income. 
We also know workers are not taking advantage of savings opportunities 
available through 401(k) plans, IRA's, and the rest.
  Again, education and outreach are both vital. The SAVER Act begins 
the process that will highlight on a national level the importance of 
educating individuals about retirement savings. First, as has been 
pointed out by the chairman and others, it directs the Department of 
Labor to maintain an ongoing program of education and outreach. Second, 
the SAVER Act convenes a national summit on retirement savings.
  Mr. Speaker, I believe it is time that we begin to recognize that 
there are Federal barriers to retirement. Call them disincentives if 
you will. But investing is complex enough without adding the many 
Federal barriers. By identifying those barriers, we in Congress can 
begin to develop a system that is investor friendly and not investor 
prohibitive, and Congress must be aware of these so that we can move 
those disincentives out of the way.
  Last, I am glad to see that Congress is taking a proactive role in 
educating the public about the benefits of retirement planning. The 
fact is, and I believe this has already been pointed out, the more a 
person understands about the benefits of retirement planning, the more 
likely that person will plan for retirement. And the sooner we begin to 
educate, the sooner we can defuse this retirement time bomb.
  I again thank the gentleman from Illinois, [Mr. Fawell], and the 
gentleman from New Jersey, ranking member Payne, for their work.
  Mr. FAWELL. Mr. Speaker, I have no further colleagues here ready to 
speak at this time. I yield myself such time as I may consume for just 
a couple of short points.
  I think the gentleman from Connecticut mentioned a salient point in 
regard to substantive legislation which is pending before the Congress, 
substantive issues. I think it is important to stress that what we have 
in this legislation certainly is basically a broad-based education for 
the country in general so that workers and employers and the public in 
general can better comprehend what the challenges are before us as we 
look to those golden years ahead of us. But also, it brings together in 
a very bipartisan fashion people from both sides of the aisle and 
brings also the private sector into being here.
  For instance, it would bring into action the American Savings 
Education Council, which is a partnership of over 200 private and 
public sector institutions, including organizations like IBM, American 
Express, the Employee Benefit Research Institute, many, many entities, 
and all in a nonpartisan atmosphere. So that I think, especially in a 
White House summit, that would be part and parcel of this legislation. 
We would be able to address ourselves perhaps more objectively and more 
dispassionately to some of the substantive issues which are before us 
here in Congress which would perhaps otherwise we may not be able to 
do.
  I would be the first to admit that there are important substantive 
issues. And I so very much appreciate my colleague from New Jersey [Mr. 
Payne] and the tremendous help that he has extended to me in regard to 
this area of deep interest.
  Mr. Speaker, that is all that I do have to say. I am not sure if my 
colleague on the other side of the aisle, [Mr. Payne] has any further 
comments to make.
  Mr. PAYNE. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I would just like to conclude by once again thanking the 
gentleman from Illinois [Mr. Fawell] for the cooperative spirit that we 
have on this very important bill. It seems like the theme is 
bipartisanship, and it shows that progress is being made. Some of us 
never felt that that would be a word uttered by us, but we see that we 
are moving in a new direction. I hope it is the right direction. But 
certainly, we look forward to this legislation moving forward.
  Ms. JACKSON-LEE of Texas. Mr. Speaker, I would like to speak in 
support of H.R. 1377 to encourage greater investment savings to 
strengthen the retirement security of our Nation's working men and 
women.
  There are over 51 million Americans who do not have retirement 
savings. The range of savings for our citizens in the 1980's was 7 to 
10 percent. Today the savings rate on average is a little over 4 
percent.
  Social Security with each passing decade is becoming more and more a 
supplement to retirement and not just a sole means of income for 
retirement for those who have sufficient incomes to allow for savings.
  In 1980, the Employment Retirement Income Security Act allowed 57.9 
million people to participate in private pension programs sponsored by 
employers and employees, and by 1992 the number had grown to 81.9 
million participants.
  The total amount of contributions into private pension programs has 
grown from $66.2 billion in 1980 to $128.8 billion in 1992.
  Although these numbers are encouraging they are still far from what 
they should be with a total national work force of 124 million 
according to the Statistical Abstract of the United States. The reality 
for most working Americans is closer to little or no savings. For most, 
retirement income does not enter into their

[[Page H3088]]

minds until the time just before retirement. This is far too late to 
make needed plans to enhance retirement income and further secure their 
financial security.
  I am a strong advocate of any change in our Nation's savings habits 
which would further strengthen the retirements of women and minorities. 
These two groups are disproportionately affected by low savings rates 
because of a much lower earnings rate on average than white males.
  If we are to overcome the disparities in the retirement habits of our 
Nation, we must deal with income levels and the cost of living in 
different regions around the Nation.
  The average annual pay in the city of Houston in 1994 was $30,000. A 
$30,000 a year income in Houston for a family of four would allow for 
little savings. Cost of living from region to region or even within 
States are not equal and this should be taken into account as we work 
to encourage greater savings and retirement planning.
  I ask my colleagues to support this effort to encourage greater 
savings among our Nation's workers. I would also ask that as other 
opportunities arise for use to raise the earnings potential or savings 
rates of minorities that we act.
  Mr. PAUL. Mr. Speaker, I rise in opposition to H.R. 1377, the Savings 
are Vital to Everyone's Retirement Act [SAVER]. Although I applaud the 
good intentions of the sponsors of this bill, I must oppose H.R. 1377 
for two reasons.
  First, the proper level of savings should be determined by the free 
choices of individuals acting in the market. Saving should be a 
voluntary decision, undertaken because individuals value the greater 
future rate of return from saving over the value of present consumption 
not because the Government instructed them that they needed to save. We 
in Washington cannot judge what the correct level of savings is for any 
individual much less the entire country. I ask my colleagues, if this 
program increases the rate of savings beyond the level Congress 
considers necessary, will we then enact a ``Spending is Vital'' bill to 
encourage greater consumption?
  Second, and perhaps more importantly, H.R. 1377 ignores the primary 
reason Americans forgo savings: Government policies that discourage the 
American people from saving. Even creating a Department of Labor-run 
education program and spending a million dollars on a series of White 
House conferences will further reduce the rate of savings as payment 
for these new initiatives will come either from taxes paid directly by 
the American people or from inflating the currency to monetize the 
national debt, thus eroding American's purchasing power. Either way, 
working Americans will be left with less funds available for saving.
  I respectfully suggest that it is not the people who need a savings 
education. They especially do not need it from a government which, the 
recent claims of the leadership and the administration notwithstanding, 
cannot balance its own books. Rather, Congress needs to be educated on 
how the interventionist policies of this Government are eroding the 
people's standard of living and making it nearly impossible for many 
Americans to save an adequate amount for their retirement, or any other 
vital needs, such as their children's education.
  Today, the average American pays more than 40 percent of this income 
in Federal, State, and local taxes. Thus, before the average American 
even has a chance to consider saving, a substantial portion of his 
paycheck is stripped from him in order to fund the welfare-warfare 
state. Federal tax policy further discourages savings through the 
exorbitant Federal taxes on capital gains, estates taxes, and the 
double taxation on corporate dividends.
  Government policy further reduces incentives Americans have available 
for savings through the inflationary policies of the Federal Reserve, 
which erode the average consumer's purchasing power. The average 
consumer must spend an ever-increasing share of his or her income 
purchasing necessities, meaning they have less income available to 
devote to savings. Today, prices are more than 15 times higher, in 
normal terms, than when the Federal Reserve was established.
  This diminishing purchasing power also creates a disincentive to 
save. When one's earnings will purchase more today than they will in 
the future, the rational action may very well be to spend the funds in 
the present. After all, who would trade a dollar's worth of goods today 
for 50 cents worth of goods in 20 years?
  Clearly, a major reason why the United States has a low rate of 
saving is the crushing tax burden imposed on the American people by the 
Government and the erosion of their purchasing power. Yet, rather than 
address how Government policy is destroying American's ability to save, 
Congress is planning to spend more taxpayer money to educate the 
American people on the importance of saving.
  Mr. Speaker, the American people neither need nor want Congress to 
spend another penny of their hard-earned tax dollars on educating them 
on the importance of savings, and they certainly do not need the 
Federal Government to spend a million dollars to create a conference on 
savings. Rather, Congress must cease all unconstitutional spending, cut 
taxes, and prohibit the Federal Reserve from debasing the currency.
  Therefore, I urge my colleagues to vote against H.R. 1377, and 
instead join me in working to eliminate the true obstacle to savings: 
the unconstitutional leviathan state that is jeopardizing the economic 
future of America and destroying the American people's incentive to 
save.
  Mr. PAYNE. Mr. Speaker, I yield back the balance of my time.

                              {time}  1130

  The SPEAKER pro tempore [Mr. Coble]. The question is on the motion 
offered by the gentleman from Illinois [Mr. Fawell] that the House 
suspend the rules and pass the bill, H.R. 1377, as amended.
  The question was taken; and (two-thirds having voted in favor 
thereof) the rules were suspended and the bill, as amended, was passed.
  A motion to reconsider was laid on the table.

                          ____________________