[Congressional Record Volume 143, Number 87 (Friday, June 20, 1997)]
[Senate]
[Pages S6043-S6044]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. GRASSLEY (for himself and Mr. Breaux):
  S. 948. A bill to amend the Older Americans Act of 1965 to improve 
the provisions relating to pension rights demonstration projects; to 
the Committee on Labor and Human Resources.


           The Pension Assistance and Counseling Act of 1997

  Mr. GRASSLEY. Mr. President, today I am introducing legislation to 
achieve one of my primary objectives as chairman of the Special 
Committee on Aging: to help workers and retirees achieve a secure 
retirement.
  As with any discussion about retirement planning, it is the norm to 
point to the ``three-legged stool'' of retirement--Social Security, 
personal savings, and a pension. Unfortunately, the legs of the stool 
may be getting warped.
  Just this week, the Aging Committee confronted an issue that is 
affecting hundreds of thousands of workers and retirees--miscalculation 
of their hard-earned pensions. This hearing was intended to raise 
consumer awareness about the need to be proactive about policing your 
pension. As one of our witnesses said, ``never assume your pension is 
error-free.''
  While it is impossible to know how many pension payments and lump sum 
distributions may be miscalculated, we know the number is on the rise. 
An audit conducted by the Pension Benefit Guaranty Corporation--focused 
on plans that were voluntarily terminated--showed that the number of 
people underpaid has increased from 2.8 to 8.2 percent. Anecdotal 
evidence suggests that the number of people receiving lump sum 
distributions who end up getting shortchanged could be 15 to 20 
percent. Those numbers are very disturbing. The practical impact is 
that retirees, and young and old workers alike, are losing dollars that 
they have earned.
  Workers and retirees need to be aware that they are at risk. They can 
help themselves by knowing how their benefits are calculated, that they 
should keep all the documents their employer gives them, and to start 
asking questions at a young age--don't wait until the eve of 
retirement.
  Unfortunately, policing your pension is not easy. Employers are 
trying to do a good job but they are confronted with one of the most 
complex regulatory schemes in the Federal Government. Pensions operate 
in a complex universe of laws, rules, and regulations. Over the last 20 
years, 16 laws have been enacted that require employers to amend their 
pension plans and then notify their workers of changes. It is not a 
simple task. If employers have problems trying to comply with Federal 
requirements, it is understandable that workers and retirees are having 
trouble getting a grasp on how their pension works.

  Trying to educate yourself about pensions implies that someone is out 
there providing information to those who need it. That is where the 
legislation that I am introducing today comes in. People who are 
concerned about their pensions--whether it's an unintentional mistake 
or outright fraud--often don't have anywhere to go for expert advice.
  Fortunately, there is an answer. Already authorized by the Older 
Americans Act, seven pension counseling projects have assisted 
thousands of people around this country with their pension problems. 
These projects provide information and counseling to retirees, and 
young and old workers in a very cost-effective manner.
  Each project received $75,000 of Federal assistance over a 17-month 
period. As is normal for other programs under the Older Americans Act, 
these dollars were supplemented by money raised from private sources. 
During their operation, the projects recovered nearly $2 million in 
pension benefits and payments. That is a return of $4 for every $1 
spent.
  My legislation contains two key provisions: First, it updates the 
Older Americans Act to encourage the creation of more pension 
counseling projects. Seven projects are not enough to reach the 80 
million people who are covered by pensions in this country. Hopefully, 
more counseling projects can be established to provide more regionally 
comprehensive assistance.
  Second, the legislation would create an 800 number that people could 
call for one-stop advice on where to get assistance. Jurisdiction over 
pension issues is spread across three government agencies--none of 
which are focused on helping individuals with individual problems--
especially if the problem does not seem to be a clear fiduciary breach 
or indicate that there may be criminal wrongdoing. An 800 number 
linking people to assistance will help close that gap.
  I look forward to working with the Labor Subcommittee on Aging, the 
entity with jurisdiction over the Older Americans Act--to get these 
changes enacted as part of the reauthorization this year.
  It is also crucial to emphasize the need for pension counseling 
projects with congressional appropriators. The projects have not 
received earmarked funding since the end of fiscal year 1996 and we 
simply cannot afford to lose the expertise that has been developed over 
the last 3\1/2\ years--especially in light of the growing concern over 
pension security.

[[Page S6044]]

  My committee has been focusing on preparing for the retirement of the 
baby boom generation--it can be anticipated that the need for 
assistance with pensions will increase as that generation begins to 
retire. Social Security, by itself, was never intended to be the 
primary source of income for a retiree. A pension from an employer can 
prove to be a determining factor in whether retirees are able to 
maintain a decent standard of living. If there is no one to go for 
assistance to get all of the pension they have earned, their chances at 
a secure retirement are gloomy indeed.

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