[Congressional Record Volume 146, Number 26 (Thursday, March 9, 2000)]
[Extensions of Remarks]
[Page E278]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


                            PENSION COVERAGE

                                 ______
                                 

                           HON. SAM GEJDENSON

                             of connecticut

                    in the house of representatives

                        Thursday, March 9, 2000

  Mr. GEJDENSON. Mr. Speaker, America's workers have made the record 
107 month economic expansion possible. They deserve to reap the rewards 
of our national prosperity. They deserve income security, and in 
particular, they deserve to have a pension and the ability to save for 
retirement. Approximately 51 million workers--about half the 
workforce--lack pension coverage of any kind. For these workers, 
retirement security is more precarious and their economic future more 
uncertain.
  This Congress has an obligation to expand pension coverage to boost 
retirement security for all Americans. We know what will make a 
difference to millions of workers. We should, for example, increase the 
portability of different types of pensions by allowing employees to 
more easily roll-over these assets when they change jobs. We should 
provide tax relief to help small businesses starting a pension plan. We 
should reduce vesting periods. These are common-sense steps, and steps 
that we are all ready and willing to take. In fact, more than 100 
members of this body have joined me sponsoring the Retirement Security 
Act, which would implement each of these options, and more.
  The bill before us today, H.R. 3932, takes some steps in the right 
direction on pensions. Regrettably, it shortchanges average working men 
and women who need the most help in saving for retirement. Instead, it 
sweetens the pension pot for the wealthiest employees, those who have 
little to worry about with respect to their own retirement. The 
implicit, unsubstantiated promise of H.R. 3832 is that highly-
compensated employees, who presumably have decision-making authority 
about pension coverage, will expand pension coverage for lower-wage 
employees as they attempt to take advantage of the bill's enhanced 
contribution and disbursement features for themselves. It is an $18 
billion gamble that may not pay off for most workers. The only 
certainty is that the highly compensated will benefit.
  According to an analysis prepared by the Center on Budget and Policy 
Priorities, of the $18 billion in pension benefits in H.R. 3832, 91.5% 
would accrue to the top 10 percent of earners, those with annual 
incomes above $89,000. At the same time, the lowest 60% of earners 
would receive less than 1% of the benefits in the package. To make 
matters worse, the Center's analysis shows that the increasing income 
thresholds for determining contributions to pension plans from $170,000 
to $200,000, employers can save money by reducing pension coverage for 
lower wage employees. Indeed, if an employer contributes a flat 
percentage of each employee's pay to a pension, he can continue to 
reward the highest paid workers with the same dollar contribution while 
reducing the percentage of pay contributed to each worker at the lower 
end of the pay-scale.
  I believe that we would better direct these resources toward middle- 
and lower-income workers and toward small business that want to provide 
retirement security to their employees. My bill accomplishes these 
goals by shortening vesting periods, providing credits to small 
businesses that start plans, and boosting pension equity for women. The 
President has proposed a series of pension and savings initiatives that 
would enhance retirement savings. He proposes tax credits that would 
encourage small businesses to establish a pension plan and to match 
employee contributions. He also proposes tax credits for financial 
institutions that establish retirement savings accounts for lower-
income workers who do not have pension coverage at work.
  Some in this body think passing these pension provisions today gets 
Congress off the hook in terms of real reform. It does not. I stand 
here to say that our job is far from finished when it comes to helping 
middle- and low-income workers save for retirement. I hope that we can 
all continue to work on this issue and pass comprehensive legislation 
expanding size pension coverage to every American.

                          ____________________