[Congressional Record Volume 148, Number 102 (Wednesday, July 24, 2002)]
[Extensions of Remarks]
[Page E1339]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




     INTRODUCTION OF THE RETIREMENT SECURITY FOR ALL AMERICANS ACT

                                 ______
                                 

                           HON. EARL POMEROY

                            of north dakota

                    in the house of representatives

                         Tuesday, July 23, 2002

  Mr. POMEROY. Mr. Speaker, I rise today to introduce the ``Retirement 
Security for All Americans Act,'' legislation that will help all of our 
nation's workers save for their retirement. Sen. Jeff Bingaman (D-N.M.) 
has already introduced a companion bill in the Senate, and I am proud 
to sponsor this bill in the House.
  Although there are several ways to measure pension coverage, there is 
one constant statistic--less than half of the workers in our country 
are covered by an employer sponsored pension plan. In spite of numerous 
incentives provided by Congress over the years, this coverage rate has 
remained virtually unchanged for the past three decades. In my home 
state of North Dakota, the plan participation rate is lower than the 
national average. Only 41 percent of workers participate in a 
retirement plan in the state. Therefore, about 60 percent of North 
Dakota's workers are without coverage and will have to fund their 
retiremnent through personal savings and Social Security. 
Unfortunately, most private sector workers who do not have a pension or 
retirement plan will not have significant savings, leaving them only 
with Social Security as their main source of income in retirement.
  The legislation I am introducing today addresses this need by 
encouraging small- and mid-size employers, where pension coverage is 
severely deficient, to not only offer plans, but to provide 
contributions to their lower paid workers. Each of these provisions 
standing alone would improve coverage and our national savings rate. 
Combined, they strongly complement each other making passage of this 
bill imperative.
  The first provision expands and makes permanent the current Savers' 
Credit that was signed into law last year. Currently, married couples 
earning less than $30,000 are entitled to a credit of half their 
retirement plan contribution. Those with income between $30,001 and 
$32,500 are eligible for a 20 percent credit, and a 10 percent credit 
is available for those with incomes above $32,500 and less than 
$50,000.
  This bill would gradually phase the credit rate down for marricd 
couples with incomes between $30,000 and $55,000 and other filers with 
incomes between $15,000 and $27,500, eliminating the cliff-like 
structure of the current credit.
  North Dakotans will greatly benefit from this provision. The average 
median household income in North Dakota is about $35,000. Over one-
third (38 percent) of households in the state have incomes of less than 
$30,000. Workers in these households will receive $.50 for every dollar 
that they save in their 401(k) or IRA. An additional 34 percent of 
households in North Dakota have incomes between $30,000 and $50,000. 
Workers in these households will receive between $.10 and $.20 for 
every dollar that they save in their 401(k) or IRA. This additional 
money will help North Dakotans, and especially baby boomers, plan for 
their retirement.
  The second provision of the bill requires all employers with more 
than 10 employees, who do not currently offer their employees a 
qualified retirement plan, to provide their workers with the option of 
a payroll deduction IRA. A payroll deduction IRA will allow workers to 
save small amounts out of each paycheck instead of making periodic or 
annual contributions to an IRA. This savings mechanism is desperately 
needed among workers and small employers who cannot afford to establish 
pension plans. To offset any administrative cost, a tax credit of $200 
for the first year and $50 for subsequent years is provided to the 
employer.
  The final section incorporates the Senate passed provision that was 
eliminated in the Economic Growth and Tax Relief Reconciliation Act of 
2001 conference that provides small businesses with a tax credit for 
their contributions to the retirement accounts of their non-highly 
compensated employees. This should not only encourage many employers to 
offer a plan for the first time, but also create a noteworthy incentive 
to contribute to these employees' accounts.
  I look forward to working with my colleagues to bridge this gap in 
pension coverage in our country. We must continue to advance proposals 
that will make meaningful improvements. I know this legislation is 
needed in North Dakota, and I hope my colleagues will join me in 
passing this important legislation.




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