[Congressional Record Volume 145, Number 96 (Thursday, July 1, 1999)]
[House]
[Pages H5326-H5327]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                          RETIREMENT SECURITY

  The SPEAKER pro tempore (Mr. Ose). Under a previous order of the 
House, the gentleman from Ohio (Mr. Portman) is recognized for 5 
minutes.
  Mr. PORTMAN. Mr. Speaker, I rise tonight to talk about retirement 
security. This Congress and the administration have I think 
appropriately made preserving Social Security a top priority for this 
year. But as this chart demonstrates, it is not enough to simply 
preserve Social Security. Our public Social Security system is only one 
part of our overall retirement security programs in this country. 
Specifically, I believe strongly that we need to take steps this year 
to significantly increase the availability of secure retirement savings 
by strengthening the private side, particularly the employer-provided 
pension side of our retirement system. This is a crucial issue for all 
Americans but particularly for baby

[[Page H5327]]

boomers who are nearing retirement. The problem we face is significant. 
Only about half of American workers have any kind of pension at all. 
This would include a 401(k), a traditional defined benefit plan, a 
profit-sharing plan and so on. About 80 percent of workers who are 
employed in smaller businesses that cannot afford because of the 
complexities of the current rules to offer plans do not have a plan, so 
about 20 percent have a pension plan. Studies show us that baby boomers 
right now are only saving about 40 percent of what they will need for 
their retirement needs. Finally, the personal savings rate in our 
country is at historic lows. In fact, the Commerce Department tells us 
that last month, the savings rate in the United States was minus 1.2 
percent. Historically low. This is all the funds that are being saved 
in this country for retirement and other needs.
  So how can people help themselves? How can people save more for their 
retirement? We have got a plan to do that. I have introduced a piece of 
legislation with the gentleman from Maryland (Mr. Cardin) which 
increases that third leg of retirement security, which is again the 
private employer-based pension system, 401(k)s, 457s, 403(b) plans, 
defined benefit plans, profit-sharing plans and so on. The legislation 
is comprehensive and it is designed to correct all the deficiencies we 
see in our current system but, simply put, it lets workers save more 
for their own retirement. It makes it less costly and burdensome for 
employers, particularly small employers, to establish new pension plans 
or to improve their own plans they have already got.
  Finally, we modernize the pension laws to make them more in tune with 
the current mobile workforce of the 21st century. How do we do this? We 
increase contribution limits. For instance, 401(k) contribution limits 
are increased from $10,000 per year to $15,000 per year, allowing 
workers to save more for their own retirement. We have catch-up 
contributions, allowing any worker age 50 or over to put an additional 
$5,000 aside for retirement. This will be particularly good for women 
who have been out of the workforce raising kids and then come back into 
the workforce and want to build up a nest egg for their retirement. We 
drastically increase portability, allowing people to roll over their 
pension savings from job to job, whether they are in the private 
sector, the government sector or the nonprofit sector. These are long 
overdue changes that are absolutely necessary again to respond to the 
much more mobile workforce of the next century. We also lower the 
vesting requirement for matching employer contributions from 5 years 
where it is now to 3 years to give more Americans the ability to get 
involved in pension plans.
  Finally, we cut red tape. The increasing complexities of the laws 
governing pensions, both in the private sector and the nonprofit and 
public sector have discouraged the growth of pension plans. For small 
businesses in particular, the costs, the burdens and the liabilities 
associated with pensions are the main reason that companies are not 
offering these plans. This legislation takes steps to cut the 
unnecessary red tape that I think has put a real stranglehold on our 
pension system.
  Who are these changes going to benefit the most? They benefit 
everybody. That is what is great about them. If we look at this chart, 
it will show us that at least 70 percent of current pension recipients, 
those who are retired and receiving pensions, make incomes of $50,000 
or less. So this is something that is really going to help the people 
who need the help the most. The next chart will show us that among 
those people who are involved in pensions who are getting pension 
benefits right now, 77 percent are middle and lower income workers. 
Again, by taking actions today to expand our pension savings, we are 
going to help the people who need the most help in saving for their 
retirement.
  This is a chance for this Congress to help all Americans do what 
people want to do, which is to provide for a retirement that is secure, 
to have increasing independence in retirement, to have more dignity in 
retirement. Imagine the impact we could have in this country if the 60 
million Americans who currently do not have retirement savings through 
a pension of their own would be able to get that kind of retirement 
security. Again, Social Security reform is very important. I support 
preserving the Social Security system. But this is an opportunity this 
Congress ought to take today and ought to pass this year to enable all 
Americans to have dignity and independence and security in retirement.

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