[Congressional Record (Bound Edition), Volume 153 (2007), Part 12]
[House]
[Pages 17163-17164]
[From the U.S. 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. 513) 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. 513

       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 21 through October 27, 2007, 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 
     $125,000,000,000 as of the 2006 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.
  Mr. Speaker, this resolution supports the goals and ideals of 
National Save for Retirement Week which will soon be designated by the 
Senate as October 21 through October 27, 2007. I want to thank Senators 
Conrad and Smith for working with me and my esteemed colleague, Mr. 
Johnson of Texas, 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 savings for retirement. Even with an 
employee-sponsored retirement plan and the promise of Social Security 
benefits, American families need to put additional money aside to 
ensure a financially secure retirement. For many American families, 
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 is purchasing health care 
coverage, paying for college, meeting energy costs, 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 now bearing more of the costs and 
investment risks of saving adequately for their retirement under 
defined contribution plans, like 401(k)s.
  As a result, the value of most workers' retirement benefits and the 
security of their retirement is now directly linked to their investment 
decisions and the balance held in their account when they retire rather 
than their years of service.
  The dramatic shift towards individual defined contribution plans is 
clear. In 1980, there were over 148,000 defined benefit plans that 
provided guaranteed benefits to workers, and there were approximately 
341,000 defined contribution plans that relied on the returns on 
investments made by workers. By 2003, just over 20 years later, the 
number of defined benefit plans had fallen to just about 47,000, while 
the number of defined contribution plans had risen to nearly 653,000.
  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 all of their retirement needs.
  A study conducted by the Employee Benefit Research Institute shows 
that average 401(k) balances range from approximately $4,500 for 
participants in their 20s with less than 3 years of service to just 
under $200,000 for participants in their 60s with at least 30 years of 
service.
  Unfortunately, a balance of less than $200,000 may not be enough to 
finance an individual's retirement years. For example, a worker in my 
own State of Pennsylvania with a $200,000 balance who makes the 
financially prudent decision of purchasing an annuity could expect a 
maximum monthly benefit of about $1,300. $1,300 can go just so far in 
meeting monthly household expenses. Retirees have to ask can $1,300 pay 
their mortgage, health costs, car payments, gas and leisure activities, 
and will it be sufficient in 5, 10 or 15 years given the increasing 
cost of living to meet their expenses and their expectations for 
retirement?
  These concerns become more alarming as recent data show a decline in 
actual worker participation in employer-sponsored retirement plans. In 
2004, only 40 percent of families had an individual who participated in 
either form of employer-based plan. This means that a majority of 
American working families are not currently participating in any 
retirement plan at work.
  As our country shifts towards an increasing reliance on individual 
savings, workers are facing increased difficulty as they prepare for 
retirement. And it heightens the importance of educating our workers 
about the pressing need to save.
  In my district, I have partnered with banks, credit unions and other 
financial institutions to host seminars to help provide families with 
the information they need to make educated, financially responsible 
decisions about their family budgets and to help them establish a habit 
of saving for the future.

                              {time}  1745

  I have also worked with schools in my district to help reach out to 
children, even at young ages, in order to emphasize the importance of 
saving for the future. It is never too early to

[[Page 17164]]

learn that every little bit we save now will help in the long run. 
Whether you're a 16-year-old receiving your first paycheck or a 25-
year-old getting your first real increase, or a 45-year-old with a 
mortgage and two kids who need braces, a habit of putting a little bit 
away each month in regular savings can, with the help of compound 
interest, add up to a secure retirement. The resolution before us today 
supports and encourages educational opportunities on a national scale 
and creates a collaborative effort to emphasize the importance of 
making saving for retirement a priority for all American families.
  Mr. Speaker, I urge my colleagues to support this resolution so that 
we can help make American workers more financially secure in their 
retirement years.
  Mr. Speaker, I reserve the balance of my time.
  Mr. SAM JOHNSON of Texas. Mr. Speaker, I rise today in support of 
National Save for Retirement Week that will be celebrated during the 
week of October 21 to 27 this year.
  Our national savings rate is abysmal. Despite our best efforts, there 
are fewer traditional pension plans every year. The costs associated 
with retiree health continue to skyrocket, and the Social Security and 
Medicare board of trustees have long warned us that without change, 
Social Security and Medicare will be unable to pay future promised 
benefits. However, there is one bright spot for Americans who have 
employer-based retirement savings plans. We all know and love the 
401(k) plan and its cousins, the 403(b) and the 457. These plans make 
it possible for Americans to take charge of their own financial future 
by putting away savings for retirement in a convenient, safe and well-
performing manner.
  For far too many people, there is too much month left at the end of 
their paycheck and they just don't get around to putting away money for 
their own retirement. With a 401(k) plan, the money for retirement is 
set aside before the other bills get paid. The paycheck that they bring 
home is then available for life's daily needs, while the money for 
retirement is going to work with compound interest. You know, Einstein 
said the most powerful force on Earth is the power of compound 
interest. For Americans who set aside part of their paycheck for a 
401(k), the power of compound interest helps them pave their way to 
retirement.
  Another great benefit of saving at work is that in most cases, the 
employer is going to match some of the amount saved. To the extent that 
an employer will match, for instance, the first 5 percent of your 
salary, that's a 100 percent rate of return on those savings. If 
someone who makes $50,000 a year saves $2,500, the employer will match 
it with another $2,500. That's free money. So the employee starts out 
at a 100 percent rate of return. If the market performs as it 
traditionally has and returns an average of 8 percent a year, the 
employee's money doubles again every 10 years. So for an additional 
set-aside of $2,500, in 10 years, that employee is likely to have 
$10,000. That's powerful.
  During the week of October 21 to 27, everyone who plays a role in 
retirement will be called to action. All the companies that sponsor 
retirement plans, all the companies that do the work to administer 
these plans, financial consultants and groups like the Employee Benefit 
Research Institute that runs the Choose to Save campaign are encouraged 
to bring this powerful message to more people.
  In the clutter of everyday life, we are bombarded with advertisements 
for everything from breakfast cereal to fast cars. Advertisements for 
retirement savings don't always break through the clutter. Again, our 
negative savings rate goes to show that. Our support of the National 
Save for Retirement Week today will help that message break through, as 
communities across our great Nation join in a concerted, week-long 
effort to teach Americans the importance of saving.
  I urge all my colleagues to join Representative Schwartz and me in 
passing this legislation so that more and more Americans can choose to 
save.
  Mr. Speaker, I yield back the balance of my time.
  Ms. SCHWARTZ. Mr. Speaker, I want to thank my colleague from Texas 
for working with me to raise this important issue. It is my hope that 
we will continue to work together to encourage Americans to save for 
retirement.
  Mr. Speaker, 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. 513.
  The question was taken; and (two-thirds being in the affirmative) the 
rules were suspended and the resolution was agreed to.
  A motion to reconsider was laid on the table.

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