[Congressional Record Volume 154, Number 105 (Tuesday, June 24, 2008)]
[House]
[Pages H5932-H5934]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
SUPPORTING THE GOALS AND IDEALS OF NATIONAL SAVE FOR RETIREMENT WEEK
Ms. SCHWARTZ. Mr. Speaker, I move to suspend the rules and agree to
the resolution (H. Res. 1294) supporting the goals and ideals of
National Save for Retirement Week.
The Clerk read the title of the resolution.
The text of the resolution is as follows:
H. Res. 1294
Whereas Americans are living longer and the cost of
retirement continues to rise, in part because the number of
employers providing retiree health coverage continues to
decline, and retiree health care costs continue to increase
at a rapid pace;
Whereas Social Security remains the bedrock of retirement
income for the great majority of the people of the United
States, but was never intended by Congress to be the sole
source of retirement income for families;
Whereas recent data from the Employee Benefit Research
Institute indicates that, in the United States, less than \2/
3\ of workers or their spouses are currently saving for
retirement and that the actual amount of retirement savings
of workers lags far behind the amount that will be needed to
adequately fund their retirement years;
Whereas many workers may not be aware of their options for
saving for retirement or may not have focused on the
importance of, and need for, saving for their own retirement;
Whereas many employees have available to them through their
employers access to defined benefit and defined contribution
plans to assist them in preparing for retirement, yet many of
them may not be taking advantage of employer-sponsored
defined contribution plans at all or to the full extent
allowed by the plans as prescribed by Federal law;
Whereas all workers, including public- and private-sector
employees, employees of tax-exempt organizations, and self-
employed individuals, can benefit from increased awareness of
the need to save adequate funds for retirement and the
availability of tax-preferred savings vehicles to assist them
in saving for retirement; and
Whereas October 19 through October 25, 2008, has been
designated as ``National Save for Retirement Week'': Now,
therefore, be it
Resolved, That the House of Representatives--
(1) supports the goals and ideals of National Save for
Retirement Week, including raising public awareness of the
various tax-preferred retirement vehicles;
(2) supports the need to raise public awareness of
efficiently utilizing substantial tax revenues that currently
subsidize retirement savings, revenues in excess of
$170,000,000,000 for the 2007 Fiscal Year Budget;
(3) supports the need to raise public awareness of the
importance to save adequately for retirement and the
availability of tax-preferred employer-sponsored retirement
savings vehicles; and
(4) calls on the States, localities, schools, universities,
nonprofit organizations, businesses, other entities, and the
people of the United States to observe this week with
appropriate programs and activities with the goal of
increasing the retirement savings for all the people of the
United States.
The SPEAKER pro tempore. Pursuant to the rule, the gentlewoman from
Pennsylvania (Ms. Schwartz) and the gentleman from Texas (Mr. Sam
Johnson) each will control 20 minutes.
The Chair recognizes the gentlewoman from Pennsylvania.
Ms. SCHWARTZ. Mr. Speaker, I yield myself such time as I may consume.
The resolution before us supports the goals and ideals of National
Save for Retirement Week, which this year falls between October 19 and
October 25, 2008. I want to thank my colleague, Mr. Johnson of Texas,
for working with me to bring attention to the importance of retirement
planning for American families.
We are living in a time when workers are being asked to shoulder an
increasing share of the cost of saving for retirement. Even with an
employee-sponsored retirement plan and the promise of Social Security
benefits, Americans need to put additional money aside to ensure a
financially secure retirement.
For many Americans, saving is becoming an increasingly difficult task
as they struggle to meet their everyday obligations. Even in solidly
middle-income families, financial resources are stretched thin as
parents work to meet other pressing needs, whether it's purchasing
health care coverage, paying for college, buying a tank of gas, or
simply paying monthly bills on time.
Over the past several years, we have seen a dramatic shift in our
retirement system. Most workers are no longer eligible for traditional
pensions, which provide a predictable monthly benefit throughout
retirement. Instead, workers are bearing more of the costs and
investment risks of saving adequately for their retirement through
workplace defined contribution plans, such as 401(k)s or through IRAs.
As a result, the value of most Americans' retirement benefits, and
the security of their retirement, is now directly linked to their own
decisions and the amount of dollars that they save over the years and
the balance held in their accounts when they retire.
The dramatic shift towards individual defined contribution plans is
clear. According to Employee Benefits Research Institute, only 10
percent of workers are currently covered by defined benefit plans,
compared to 63 percent of workers who are currently covered by 401(k)
plans. This stands in stark contrast to the reality of 30 years ago
when it was just the opposite, when coverage rates were 62 percent for
defined benefits plans and 16 percent for 401(k)s.
While this shift is empowering American workers to make more of their
own financial decisions, many families are finding it difficult to save
significantly to meet their retirement needs. It is particularly
difficult during a time of economic uncertainty, as we are experiencing
today.
It may be difficult but continues to be vitally important for
Americans to prepare for retirement, to think about savings, especially
given that half of all workers have less than 25 percent in total
savings, whether for retirement or to help them in periods of financial
difficulty.
[[Page H5933]]
As our country shifts towards an increasing reliance on individual
savings and as families are tempted to dip into their retirement
accounts to meet current everyday expenses during this time of high gas
and food prices, it is more important than ever that we educate
Americans about the pressing need to save even small amounts every year
that they possibly can.
In my district, I have partnered with banks and credit unions and
other financial institutions to host seminars to help provide
information on how to make educated, financially responsible decisions
about personal and family budgets and to help establish a habit of
saving for the future.
I have even visited with schools in my district to help reach out to
young people in order to emphasize the importance of saving for the
future. It is never too early to learn that every little bit we save
now will help in the long run.
So whether you're a 16-year-old receiving your first paycheck, or a
25-year-old getting your first real raise, or a 45-year-old with a
mortgage and two kids, the habit of putting a little bit away every
month in regular savings can, with the help of compound interest, add
up to a more secure retirement.
{time} 1345
The resolution before us supports and encourages educational
opportunities on a national scale and creates a collaborative effort to
emphasize the importance of making savings for retirement a priority
for all Americans.
Mr. Speaker, I urge my colleagues to support this resolution so that
we can help Americans create a financial security for themselves in
their retirement years.
Mr. Speaker, I reserve the balance of my time.
Mr. SAM JOHNSON of Texas. Mr. Speaker, I yield myself such time as I
may consume.
Mr. Speaker, I rise in support of H. Res. 1294, to recognize the
goals of National Save for Retirement Week. I am pleased to join my
colleague from Pennsylvania, Representative Allyson Schwartz, to again
introduce a resolution in support of National Save for Retirement Week.
The week is designated this year as October 19-25. You know the best
time for Americans to save is on payday. That is when they have got the
cash. When employees save through their employer-based retirement plan,
the money comes out of their paycheck before other tempting priorities
get in the way.
Saving for numero uno ought to be every working American's top
priority before spending on optional things like dinner, movies, or, I
hope today, still buying a shiny new car. Saving for retirement is not
as flashy or fun as many competing priorities, but the only way most of
us are ever going to be able to afford retirement in the future is by
saving today.
This spring, the Employee Benefit Research Institute released its
annual retirement confidence survey that shows Americans' confidence in
their ability to afford a comfortable retirement has dropped to its
lowest level in several years. This drop in confidence represents
several concerns, but the big concerns I hear about are the overall
state of the economy, the weak stock market and concern about one's own
job security.
The answer to these concerns, in my opinion, is to save in an
employer-based retirement plan. The first reason is that most employers
match the employee contributions. If an employee puts 1 percent of
earnings into a plan, many employers match that contribution dollar for
dollar. That means the employee gets a 100 percent rate of return. Even
if the market slides a little bit, the employee still comes out ahead
because of the company match. Many employers match even more
generously, up to 4 or 6 percent of salary. When an employer is handing
out free money, I encourage all employees to get in line and let's say
``yes.''
A second reason to save at work is our economy is going to recover
soon and employees can look at their current stock market purchases as
buying low. The formal term for regular purchases in the stock market
is dollar cost averaging. That means you purchase mutual funds or
stocks at regular intervals, such as on payday, regardless of share
price. Under dollar cost averaging, when the market prices are low, you
end up buying more shares with a set amount of money, and when market
prices are high you buy fewer shares with your set amount of dollars.
Buy low, sell high. It works every time to build wealth.
The third reason to participate in an employer-based retirement plan
is that the sooner people save money, the sooner the most powerful
force on Earth can work for them, the power of compound interest. With
an average of 8 percent return, money doubles every 9 years. The cost
of living in the future, even in retirement, is not going to go down,
but money saved early in one's work life will make retirement easier.
Another powerful force in saving is inertia, sometimes described as a
body at rest stays at rest, or a body in motion stays in motion.
Employers and Congress recognize that principles of inertia often means
that employees never get around to affirmatively signing up for
retirement plans at work.
To address inertia, Congress passed a law to allow employers to
automatically enroll employees in retirement plans and get those
savings rolling forward with the power of compound interest. The
amazing thing is we are now seeing roughly 90 percent employer
participation in retirement plans with an automatic enrollment, up from
previous levels of roughly 70 percent. I am glad to see this new law is
working.
Last year, after we enacted a similar resolution, I was happy to see
reports about the number of employers that promoted National Save for
Retirement Week. There were lots of employee benefit fairs, promotional
enrollment meetings and seminars, and other employers printed up new
brochures for employees to review regarding the importance of
retirement savings. I hope to work with more employers in my
congressional district this year to bring the message of Save for
Retirement Week to employees.
Mr. Speaker, I know that Americans are strapped for cash and that
right now saving is a hard thing to do. Rising gas prices are taking
bigger and bigger bites out of everyone's income. It is hard to set
aside retirement money for years down the road. It feels like right now
there is a lot of month left at the end of every paycheck.
But Americans don't want to work forever, and the only way to retire
is to plan and save. I would encourage everyone to go to the Web site
choosetosave.org and use any of the calculators that help to plan for
retirement, college savings, and budgeting in general. Planning is a
great first step to financial security.
Mr. Speaker, we know that Americans who have only Social Security as
retirement income end up in poverty. As much as some of my colleagues
hate to admit it, Social Security has a serious funding problem in a
relatively short time and we need to address the problem. We can't just
tax our way out of that problem either.
Part of the reason for our horrible national savings rate is that
Americans are paying a whopping 15 percent of salary between their
individual share and their employer's share in payroll taxes.
In 1984, when payroll taxes went up dramatically by 5 percent, the
national savings rate fell by the same amount. Congress took those
payroll taxes out of Americans' pockets in order to fund Social
Security and Medicare, with the promise that the programs would always
be there to pay benefits in the future. The problem is our programs
face huge structural deficits, and Americans have not been saving. We
need to change a lot of things, but the first thing we can do is get
people to start saving. Americans need to save at work where they
generally get a match from their employer and where the money goes down
to their own retirement accounts before expenses get in the way.
I look forward to working with employers and financial institutions
in my Dallas and Collin County representation areas later this year to
promote National Save for Retirement Week, which will happen the week
of 19 October through 25 October.
Mr. Speaker, I want to thank Allyson for introducing this
legislation.
Mr. Speaker, I yield back the balance of my time.
[[Page H5934]]
General Leave
Ms. SCHWARTZ. Mr. Speaker, I ask unanimous consent that all Members
have 5 legislative days to revise and extend their remarks.
The SPEAKER pro tempore. Is there objection to the request of the
gentlewoman from Pennsylvania?
There was no objection.
Ms. SCHWARTZ. I just want to close by thanking my colleague Mr.
Johnson for working with me on this legislation this year, and for
encouraging even in these difficult economic times that all Americans
think about saving even a little bit of I week. With compound interest,
it does add up, particularly if you start young to do that. But any
time is good. And certainly as we recognize that there is increasing
reliance on our own individual ability to save and to think about the
future, this is an important resolution that can help Americans have
greater financial security in their retirement.
I yield back the balance of my time.
The SPEAKER pro tempore. The question is on the motion offered by the
gentlewoman from Pennsylvania (Ms. Schwartz) that the House suspend the
rules and agree to the resolution, H. Res. 1294.
The question was taken.
The SPEAKER pro tempore. In the opinion of the Chair, two-thirds
being in the affirmative, the ayes have it.
Mr. SAM JOHNSON of Texas. Mr. Speaker, I object to the vote on the
ground that a quorum is not present and make the point of order that a
quorum is not present.
The SPEAKER pro tempore. Pursuant to clause 8 of rule XX and the
Chair's prior announcement, further proceedings on this motion will be
postponed.
The point of no quorum is considered withdrawn.
____________________