[Congressional Record Volume 147, Number 174 (Friday, December 14, 2001)]
[Extensions of Remarks]
[Pages E2295-E2296]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




              RETIREMENT OPPORTUNITY EXPANSION ACT OF 2001

                                 ______
                                 

                         HON. WILLIAM J. COYNE

                            of pennsylvania

                    in the house of representatives

                      Thursday, December 13, 2001

  Mr. COYNE. Mr. Speaker, today I am introducing legislation, the 
``Retirement Opportunity Expansion Act of 2001,'' that would increase 
pension participation for workers without pensions, low-wage workers, 
and women. Joining me in this effort are Congressman Charles B. Rangel, 
the ranking member of the Committee on Ways and Means, and Congressman 
Robert T. Matsui, the ranking member of the Social Security 
Subcommittee.
  Earlier this year the House passed H.R. 10, ``The Comprehensive 
Retirement Security and Pension Reform Act.'' I saw that bill as a 
beginning, a first step, to improve retirement opportunities for 
workers in this country. But, at that time, I emphasized the need to do 
more to address the many gaps and shortfalls in pension coverage.
  In March 1999, the Oversight Committee of the Committee on Ways and 
Means held hearings on pension issues. At those hearings, Teresa Heinz, 
in her capacity as Chairman of the Heinz Foundation Philanthropies, 
testified that nearly 40 percent of women are dependent on Social 
Security for almost all of their retirement income because they have 
fewer opportunities to participate in the retirement plans provided by 
employers. This is but one aspect of the problems facing our country as 
the baby-boom generation begins to retire and younger workers lack 
adequate pension coverage.
  I believe that steps must be taken to help employees to fund their 
retirement accounts, to assist small business owners to start and 
maintain pension plans for themselves and their employees, and to 
provide women with improved retirement income protections. To that end, 
I have included in this bill a refundable tax credit that is 
substantially the same as that provided for in the Democratic 
substitute which was introduced by Mr. Neal in the 106th Congress.
  Recently I ask the General Accounting Office (GAO) to look at the 
extent of pension coverage among American workers and the likely 
effects of increasing contribution limits in defined contribution 
plans, the type of pension plan that covers most pension participants. 
GAO identified what I believe to be disturbing trends in the degree of 
pension participation among lower-income and women workers. For 
instance, while 47 percent of all workers participate in some type of a 
pension plan, only 38 percent of workers earning less than $40,000 per 
year participate in a pension plan. Fully 70 percent of workers earning 
between $40,000 and $74,999 participate in a plan. GAO also revealed 
that 56 percent of female workers do not participate in a pension plan.
  The disparities in coverage are even greater when looking at defined 
contribution plans. In a defined contribution plan, the employee may 
provide all or a portion of the funds and decide how to invest the 
money. There is no guaranteed benefit amount or formula as there are in 
traditional defined benefit plans. Of all workers who earned less than 
$40,000 per year, 28 percent participated in defined contribution 
plans. Only 32 percent of all female workers participated in defined 
contribution plans. Further, GAO found that only 8% of all defined 
contribution plan participants would likely benefit directly from 
increases in statutory contribution limits. Thus, it is clear that 
changes in contribution limits will do little directly to promote or 
extend coverage to workers lacking pension coverage.
  Clearly greater effort is needed to encourage and facilitate pension 
participation, especially among lower-income workers and women.
  After considering GAO's findings and revisiting the issues raised 
during our consideration of H.R. 10, I am introducing a pension bill 
which addresses the following issues: The expansion of pension coverage 
for workers without pensions; the expansion of coverage for low-wage 
workers; the improvement of pension coverage for women; and the 
creation of additional incentives for small businesses to provide 
pension coverage for employees.
  These are the very issues I emphasized in May during our deliberation 
of H.R. 10.
  Because the findings of the GAO and the research of other groups such 
as the Pension Rights Center and the Women's Institute for a Secure 
Retirement (WISER) demonstrate that lower-income and female workers are 
much less likely to be participants in pension plans, I believe we must 
direct our focus to these workers who often toil at the margins of 
pension coverage. Specific efforts are needed to help women secure the 
pension benefits which all manner of their contributions have earned 
for them.
  The Pension Rights Center, a nonprofit consumer rights organization 
dedicated to promoting retirement income security, has expressed its 
``strong support'' for the Retirement Opportunity Expansion Act of 
2001, noting that this legislation would ``encourage the creation of 
new private retirement plans for those lacking such coverage, 
particularly low and moderate wage earners.'' WISER, a nonprofit 
organization that seeks to ensure that poverty among older women will 
be reduced by improving the opportunities for women to secure 
retirement benefits, stated that they are ``extremely gratified'' about 
the introduction of this bill. They have urged support for the bill in 
order to ``improve the alarming retirement situation for older women . 
. . where millions of women are retiring into poverty, despite a 
lifetime of work and caregiving for their families.''
  Earlier initiatives provided a starting point to improve the pension 
system we have. It is now time to develop the pension system that we 
need. I would urge my colleagues to join me in supporting this 
legislation and ensuring its passage during the 107th Congress.
  Mr. Speaker, I am attaching a summary of the provisions of the 
``Retirement Opportunity Expansion Act of 2001.''

        The Retirement Opportunity Expansion Act of 2001 Summary


   TITLE I: EXPANSION OF PENSION COVERAGE TO WORKERS WITHOUT PENSIONS

       The purpose of this section is to provide an incentive for 
     low- and middle-income individuals to save for retirement.
       Section 101: This section would provide a refundable tax 
     credit to low and middle income workers of up to 50% of 
     annual contributions made to a traditional, deductible IRA or 
     an employer-sponsored pension plan (e.g., 401 (k), 403(b) or 
     457 plans).
       Eligible contributions could not exceed the maximum annual 
     allowable contributions to

[[Page E2296]]

     a deductible IRA. The credit would be phased out as the 
     income of the eligible taxpayer increases. (Eligible 
     taxpayers defined as married filing joint returns would 
     receive the maximum credit on AGI of $30,000 and the credit 
     would be phased out at $50,000; head of household returns 
     would receive the maximum credit on AGI of $22,500 and the 
     credit would be phased out at $37,500; single and married 
     filing separate returns would receive the maximum credit on 
     AGI of $15,000 and the credit would be phased out at 
     $25,000.)
       An eligible taxpayer would be required to earn at least 
     $5,000 during the tax year and to have attained the age of 18 
     by the close of the tax year and could not qualify as a 
     dependent child of another taxpayer or be a full-time 
     student.


          TITLE II: EXPANSION OF COVERAGE TO LOW-WAGE WORKERS

       The purpose of this section is to expand pension 
     participation among lower-paid workers.
       Section 201: This section would allow contributions of up 
     to $2,000 made to an IRA through payroll deduction generally 
     to be excluded from an employee's income (and not to be 
     reported on the employee's form W-2) if the taxpayer is 
     otherwise eligible for a deductible IRA.


          TITLE III: IMPROVEMENT OF PENSION COVERAGE FOR WOMEN

       The purpose of these sections is primarily to expand 
     pension benefits to women and individuals who have spent time 
     out of the workforce to raise children or care for parents or 
     spouses.
       Section 301: This section would require pension plans to 
     provide the option of a ``joint and 3/4 survivor annuity'' 
     for participants who so elect. Under the option, a widowed 
     spouse would receive 75 percent of the pension benefit 
     received during the life of the other spouse.
       Section 302: This section would require spousal consent on 
     401(k) distributions of more than 10% of the value of the 
     account.
       Section 303: This section would provide full vesting of 
     pension benefits upon the death or disability of the plan 
     participant.
       Section 304: This section would prohibit plans from making 
     changes in 401(k) investments or giving lump sum 
     distributions during the 90-day period from the date the plan 
     is notified of the preparation for a domestic relations 
     order.
       Section 305: This section would require the Secretary of 
     Labor to conduct a study to determine the participation rate 
     of women and other underrepresented minorities in pension 
     plans and to make recommendations to the Congress for way to 
     increase participation among these groups of workers.
       Section 306: This section would count family and medical 
     leave time hours of service for purposes of meeting pension 
     participation, vesting and accrual thresholds.


  TITLE IV: INCENTIVES FOR SMALL BUSINESSES TO OFFER PENSION BENEFITS

       The purpose of this section is to encourage small 
     businesses to offer retirement benefits to their employees.
       Section 401: This section would give businesses with 100 or 
     fewer employees a tax credit of up to 50 percent of employer 
     contributions made to a pension plan during the first three 
     years.
       Section 402: This section would establish the Secure Money 
     or Annuity Retirement Trusts (SMART). SMART plans are 
     simplified, tax-favored pension plans that combine the 
     features of both defined benefit and defined contribution 
     plans. The plans would provide participants with a minimum 
     guaranteed benefit at retirement.
       Section 403: This section would simplify the definition of 
     ``highly compensated employee.''

     

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