[Congressional Record Volume 146, Number 68 (Tuesday, June 6, 2000)]
[Senate]
[Pages S4566-S4567]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. ASHCROFT:
  S. 2671. A bill to amend the Internal Revenue Code of 1986 to promote 
pension opportunities for women, and for other purposes; to the 
Committee on Finance.

[[Page S4567]]

    the pension opportunities for women's equality in retirement act

  Mr. ASHCROFT. Mr. President, I rise today to introduce the Pension 
Opportunities for Women's Equality in Retirement (POWER) Act of 2000. 
This legislation is important because the current tax code often fails 
to give women--especially women who take time off to raise children--
sufficient opportunities to earn a large enough pension to guarantee 
their financial security in retirement.

  The facts demonstrate that women need help in building pensions for 
their future. In America today, two-thirds of women over 65 have no 
pension other than Social Security. This translates into 300,000 women 
in my home state of Missouri and 14 million women nationwide. At the 
same time, the median income from assets for women age 65 and over is 
only $860 a year. Retirement is often compared to a three-legged stool, 
with the three legs being pensions, savings, and Social Security. Now, 
everyone knows what happens to a three legged stool when one of the 
legs is missing: it falls over. But these statistics shows that many, 
too many, American women are trying to manage their retirements on only 
one leg of the stool.
  As a result of the lack of pensions and relatively low savings among 
American women, older women are twice as likely as older men to be 
living near or below the federal poverty threshold. Further, the 
poverty rates for widows, divorced women, and never-married women are 
significantly higher than the rate for all elderly women. The 20 
million elderly American women--including 440,000 in Missouri--carry an 
extremely high risk of poverty.
  The causes for this risk can be found in the tax code and pension 
rules. One of the key elements of pension building is called vesting. 
Employees cannot build pension assets until they vest, or serve at a 
particular job for a redetermined amount of time, often 5 years. 
Employers have a perfectly good reason for vesting requirements--they 
want to encourage job stability--and there is no inherent bias in these 
requirements. But the effect of these requirements is to make it harder 
for women to build up pension assets. The reason for this is that the 
median job tenure for women is 3.8 years, well below the median job 
tenure for men, as well as the 5 years most pension plans require for 
vesting.
  Another problem women face is that 59 percent of women have not 
figured out how much they need to save for retirement. When workers, 
men and women alike, are younger, they are frequently not thinking of 
how much they need to save for retirement. Younger workers are 
concerned with mortgages, school loans, children's needs. When these 
workers get older, and start thinking about retirement, they often 
increase the amount of money they will put away for retirement. 
Unfortunately women, who have often spent less time in the workplace, 
have less time in which to make the required `catch-up' contributions 
that will help create a stable and secure retirement. This process is 
made even harder by existing rules that limit the amounts of the catch-
up contributions.
  Given the difficulties women, especially unmarried women, face in 
their retirement years, I believe that it is time for the Congress to 
step up and to ensure that retirement security law provides for higher 
contribution limits for working women, easier catch-up to make up for 
years women missed in the labor force, and increased portability of 
pensions.
  The POWER Act of 2000 will do three major things: First, the bill 
will increase contribution limits, allowing workers to contribute more 
money to retirement accounts during their working years, thereby 
ensuring that their retirements will be more secure.
  For workers who are over fifty, the bill allows additional pension 
contributions of up to 50 percent more than allowed under current law. 
This provision is particularly helpful to women who leave the labor 
force to raise their children, and then want to ``catch-up'' when they 
are older by increasing their contributions in the years leading up to 
retirement. This bill also requires employers to vest employees 
earlier, so that women, who have shorter average job tenures, can 
accrue pension benefits earlier.
  The bill's third section eases portability of pensions among workers 
who switch jobs. The bill eases rollovers and requires that rollovers 
apply to all retirement plans. In addition, the bill extends pension 
rollovers to include post-tax as well as pre-tax distributions, and 
calls for the post-tax distributions to be accounted for separately.
  These provisions are not controversial. They have all passed both the 
Senate and the House of Representatives as part of the Taxpayer Refund 
and Relief Act. President Clinton vetoed that earlier bill. I disagree 
with the President, but he is entitled to his opinion. On these 
provisions, however, it is impossible to claim that these female-
friendly provisions will cost too much money. The provisions in this 
bill will help all workers save more for retirement, and develop larger 
pensions for their golden years.
  This bill will particularly help women, who face a much greater risk 
of poverty. While the POWER Act will help both women and men save for 
retirement, it will correct specific pension inequalities in the 
current law that particularly hurt women. Missouri's nearly 900,000 
working women certainly will benefit through enhanced opportunities to 
create financial security for retirement. In Missouri, 65 percent of 
working age women are in the paid labor force. According to the 
Missouri Women's Council, only 26 percent of older women receive a 
pension, compared with 47 percent of men. In addition, the pensions 
that women do receive are significantly less than those of men--$4,200 
for women, on average, compared with $7,800 for men.
  I hope that the Senate will take quick action on this matter, to help 
American women provide for safe and secure retirements.
                                 ______