[Congressional Record Volume 146, Number 88 (Tuesday, July 11, 2000)]
[Senate]
[Pages S6474-S6476]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. HARKIN:
  S. 2849. A bill to create an independent office in the Department of 
Labor to advocate on behalf of pension participants, and for other 
purposes; to the Committee on Health, Education, Labor, and Pensions.


            pension participants advocacy office legislation

  Mr. HARKIN. Mr. President, I am pleased to introduce the ``Pension 
Participant Advocacy Act.'' A similar measure is being introduced by 
Congressman Rob Andrews in the House.

  It is no secret that the elderly population in America is growing at 
an unprecedented rate. In 1996, about one in every eight Americans was 
age 65 or older--that amounts to 33.9 million Americans. That number is 
expected to double by 2030.
  Generally, people work for three main benefits, their salary or 
wages, their health care and their pensions. Of the three, most people 
tend to focus least on their pensions, at least till they near 
retirement. But, pensions are not only very important, they are highly 
variable in their generosity.
  Ideally, retirement is a three-legged stool. One leg is Social 
Security. It is

[[Page S6475]]

run by the federal government. Almost all employees and their employers 
are required to pay into Social Security. Appropriately, there is a 
great deal of legislative concern about Social Security, the only funds 
available to many retirees. Another leg is regular personal savings 
generally outside of Congress' purview. And, the third is pensions. 
Millions receive pension benefits and unfortunately millions of others 
do not.
  In the United States, there is no mandatory requirement that an 
employer provide a pension plan. But, the federal and state governments 
offer very significant tax benefits to both companies and individuals 
to entice them to save in a dedicated way for retirement.
  Ensuring a secure retirement for all Americans is more than just a 
goal. It's a fiscal necessity. We know from experience that a strong 
pension system drastically eases the demands on our social safety net. 
So, year after year, our government invests a large chunk of taxpayer 
money, revenues not collected, to promote pensions.
  But while the Federal government has invested huge sums by forgiving 
and deferring taxes to entice investments in pensions, there has been 
limited review of how well the system is treating average workers and 
retirees. But, unfortunately, there are not comparably large and 
sophisticated groups who speak for average workers.
  Another problem is the very structure of the federal pension 
bureaucracy. Nobody has the assigned job of generally looking out for 
the pension participant. Yes, the Pension Benefits Guaranty Corporation 
does provide benefits to participants when their plans go bankrupt. The 
Treasury and the IRS have the responsibility to make sure that the 
pension laws in the Tax Code are fairly followed. But that is not their 
focus. The Department of Labor has considerable pension responsibility. 
But, their first focus is on the proper management of pension plans' 
funds. And, the needs of the participants are sometimes in conflict 
with the financial health of pension plans. In recent years, the 
Congress has funded programs where pension participants, employees or 
retirees, can ask some basic questions. But, there is a lack of any 
systematic effort to uncover unfortunate or abusive practices. Let's 
look at two pension problems I have recently tried to resolve.

  Mr. President, as I wrote to the Department of Labor and Treasury 
this past January, lump sum payments continue to deplete Americans' 
pension payments by up to 50% with very little disclosure. Employers 
give new retirees a sheet of paper with two numbers on it--a small, 
monthly amount and a large, lump sum payment. Imagine getting that 
piece of paper. Which one would you take? Despite our disclosure law, 
many employers will not tell you that the larger number actually equals 
half the value of the smaller number over time.
  This has been going on for years, and who has spoken up for the 
participants? The Departments of Labor and Treasury took four months to 
respond to my letter. If that is the kind of response a Senate office 
gets, where can pension participants turn when their livelihood depends 
upon getting answers? Let me tell you the story of Paul Schroeder, a 
44-year old engineer who has worked for Ispat Inland, Inc, an East 
Chicago steel company, for 19 years. When the company converted to a 
cash balance plan, Paul calculated that his benefits would level off 
for as long as 13 years. The company would be putting no money into his 
pension for over a decade.
  Meanwhile, new workers at the company would get added pension 
benefits with each pay check. This is called the ``wear away'' system. 
It is the period in which the cash balance benefit catches up to the 
value of the old plan benefit. Apparently, this practice is legal 
because of one sentence that was quietly inserted into an unrelated 
Treasury regulation just before it was approved in 1991. The EEOC is 
just now undergoing a detailed study to see if these plans violate age 
discrimination laws. After almost a decade of older employees having 
their pension assets frozen indefinitely, I ask you: who advocated on 
their behalf?
  I only learned about this issue from a group of IBM employees who 
spent months clamoring to get our attention here in Congress. Those 
employees told their story to anyone who would listen. But when pension 
proposals don't affect the well-connected, who speaks for the 
participants?
  I have introduced legislation that has received 47 votes in the 
Senate to provide for payments and I will try to pass it again. But, we 
should not need to pass a new law. The existing laws against age 
discrimination should have clicked in. For years, nobody was looking.
  The bottom line is that no government agency is really looking out 
for the interests of pensioners. There are a few private organizations 
that are desperately trying to protect pension rights. But they're 
underfunded, scattered around the country, and easily overpowered by 
the better funded, better organized groups.
  That is why I am proposing legislation to create an office whose 
specific function is to advocate for the rights of pensioner 
participants, both when they are employees and when they are retired. 
Our nation's seniors depend on their pensions to keep them afloat in 
retirement, and Social Security was never meant to do it alone. As the 
elderly population grows, it is in our nation's economic interest to 
ensure that pension legislation focuses on the best interests of 
participants.
  Mr. President, The Office of Pension Participant Advocacy created in 
this bill would:
  Actively seek out information and suggestions on pension policies and 
on Federal agencies which affect pension participants.
  Evaluate the efforts of Federal agencies, businesses and industry to 
assist pension participants.
  Identify significant problems faced by employees and retirees,
  Make annual recommendations documenting significant pension problems 
and recommending legislative and regulatory solutions.
  And examine existing pension plans and determine the extent to which 
current law serves pensioners in those plans.
  Mr. President, we have a strong economy. But we also have an 
obligation to save a place at the table for those who made it strong. 
Our nation's pensioners deserve a say in the policies that determine 
their livelihood. They deserve the right to have their interests 
represented.
  In the last 25 years, the Employee Retirement Income Security Act, 
commonly known as ERISA has been extremely successful, but it has 
created a complex web of pension law that gives authority to multiple 
agencies with no central place people can turn to for help. Time and 
time again, the needs of pension participants are ignored, and the 
pensioners who don't have the time or the resources to navigate the web 
of pension authority are weeded out.
  We need one central place where pension participants can turn to when 
problems arise. We need one place in government whose sole obligation 
is to look out for the general pension interests of employees and 
retirees concerning their pensions. We need an office that will be an 
advocate for pension participants. For that reason, I urge my 
colleagues to join me in supporting this critical legislation.
  Mr. President, I ask unanimous consent that a copy of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2849

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

     SECTION 1. OFFICE OF PENSION PARTICIPANT ADVOCACY.

       (a) In General.--Title III of the Employee Retirement 
     Income Security Act of 1974 (29 U.S.C. 3001 et seq.) is 
     amended by adding at the end the following:

          ``Subtitle D--Office of Pension Participant Advocacy

     ``SEC. 3051. OFFICE OF PENSION PARTICIPANT ADVOCACY.

       ``(a) Establishment.--
       ``(1) In general.--There is established in the Department 
     of Labor an office to be known as the `Office of Pension 
     Participant Advocacy'.
       ``(2) Pension participant advocate.--The Office of Pension 
     Participant Advocacy shall be under the supervision and 
     direction of an official to be known as the `Pension 
     Participant Advocate' who shall--
       ``(A) have demonstrated experience in the area of pension 
     participant assistance, and
       ``(B) be selected by the Secretary after consultation with 
     pension participant advocacy organizations.

[[Page S6476]]

     The Pension Participant Advocate shall report directly to the 
     Secretary and shall be entitled to compensation at the same 
     rate as the highest rate of basic pay established for the 
     Senior Executive Service under section 5382 of title 5, 
     United States Code.
       ``(b) Functions of Office.--It shall be the function of the 
     Office of Pension Participant Advocacy to--
       ``(1) evaluate the efforts of the Federal Government, 
     business, and financial, professional, retiree, labor, 
     women's, and other appropriate organizations in assisting and 
     protecting pension plan participants, including--
       ``(A) serving as a focal point for, and actively seeking 
     out, the receipt of information with respect to the policies 
     and activities of the Federal Government, business, and such 
     organizations which affect such participants,
       ``(B) identifying significant problems for pension plan 
     participants and the capabilities of the Federal Government, 
     business, and such organizations to address such problems, 
     and
       ``(C) developing proposals for changes in such policies and 
     activities to correct such problems, and communicating such 
     changes to the appropriate officials,
       ``(2) promote the expansion of pension plan coverage and 
     the receipt of promised benefits by increasing the awareness 
     of the general public of the value of pension plans and by 
     protecting the rights of pension plan participants, 
     including--
       ``(A) enlisting the cooperation of the public and private 
     sectors in disseminating information, and
       ``(B) forming private-public partnerships and other efforts 
     to assist pension plan participants in receiving their 
     benefits,
       ``(3) advocate for the full attainment of the rights of 
     pension plan participants, including by making pension plan 
     sponsors and fiduciaries aware of their responsibilities,
       ``(4) give priority to the special needs of low and 
     moderate income participants, and
       ``(5) develop needed information with respect to pension 
     plans, including information on the types of existing pension 
     plans, levels of employer and employee contributions, vesting 
     status, accumulated benefits, benefits received, and forms of 
     benefits.
       ``(c) Reports.--
       ``(1) Annual report.--Not later than December 31 of each 
     calendar year, the Pension Participant Advocate shall report 
     to the Committees on Education and the Workforce and Ways and 
     Means of the House of Representatives and the Committees on 
     Health, Education, Labor, and Pensions and Finance of the 
     Senate on its activities during the fiscal year ending in the 
     calendar year. Such report shall--
       ``(A) identify significant problems the Advocate has 
     identified,
       ``(B) include specific legislative and regulatory changes 
     to address the problems, and
       ``(C) identify any actions taken to correct problems 
     identified in any previous report.
     The Advocate shall submit a copy of such report to the 
     Secretary and any other appropriate official at the same time 
     it is submitted to the committees of Congress.
       ``(2) Specific reports.--The Pension Participant Advocate 
     shall report to the Secretary or any other appropriate 
     official any time the Advocate identifies a problem which may 
     be corrected by the Secretary or such official.
       ``(3) Reports to be submitted directly.--The report 
     required under paragraph (1) shall be provided directly to 
     the committees of Congress without any prior review or 
     comment than the Secretary or any other Federal officer or 
     employee.
       ``(d) Specific Powers.--
       ``(1) Receipt of information.--Subject to such 
     confidentiality requirements as may be appropriate, the 
     Secretary and other Federal officials shall, upon request, 
     provide such information (including plan documents) as may be 
     necessary to enable the Pension Participant Advocate to carry 
     out the Advocate's responsibilities under this section.
       ``(2) Appearances.--The Pension Participant Advocate may 
     represent the views and interests of pension plan 
     participants before any Federal agency, including, upon 
     request of a participant, in any proceeding involving the 
     participant.
       ``(3) Contracting authority.--In carrying out 
     responsibilities under subsection (b)(5), the Pension 
     Participant Advocate may, in addition to any other authority 
     provided by law--
       ``(A) contract with any person to acquire statistical 
     information with respect to pension plan participants, and
       ``(B) conduct direct surveys of pension plan 
     participants.''
       (b) Conforming Amendment.--The table of contents for title 
     III of such Act is amended by adding at the end the 
     following:

          ``Subtitle C--Office of Pension Participant Advocacy

``3051. Office of Pension Participant Advocacy.''
       (c) Effective Date.--The amendment made by this section 
     shall take effect on January 1, 2001.
                                 ______