[Congressional Record (Bound Edition), Volume 156 (2010), Part 11]
[Senate]
[Pages 15905-15907]
[From the U.S. Government Publishing Office, www.gpo.gov]




                          RETIREMENT SECURITY

  Mr. KOHL. Madam President, I rise today as chairman of the Special 
Committee on Aging to talk about retirement security in America. In 
recent years, workers have seen their savings take a hit, with many 
wondering whether they will ever be able to retire. The current 
retirement income deficit--in other words, the gap between what 
Americans will need in retirement and what they will actually have--is 
$6.6 trillion, according to the nonpartisan Center for Retirement 
Research at Boston College. Now more than ever, we need to strengthen 
our Nation's pension and 401(k) systems so that Americans can protect 
the retirement savings they work a lifetime to earn.
  In doing so, we must recognize that today's retirement savings 
vehicles look a lot different than they did a generation ago. Our 
current system increasingly places the responsibility for saving on the 
individual, meaning that people have to make retirement decisions on 
their own because many employers are not doing it for them. That is why 
the Aging Committee is working to give people more guidance, more 
tools, and more protection.

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  Many Americans are increasingly relying on 401(k)-type defined 
contribution savings plans to fund their retirement. Having a 401(k) 
requires an individual to make several proactive decisions, including 
the decision to save, how much to save, how to invest their savings, 
whether to take loans out, and how to make their savings last through 
retirement. The committee's focus has been on helping participants make 
better decisions. After all, a person should not have to be a financial 
planning expert in order to plan for a secure retirement.
  We are discovering that the best system would have certain automatic 
features, such as automatic enrollment with escalating contribution 
rates and target date funds that adjust automatically, combined with 
options to opt out for those who want to create their own portfolio. We 
are pushing for more retirement coverage through ideas like better 
target date funds that are designed in the best interests of 
participants.
  We are collaborating with the Department of Labor on many of these 
issues and also introducing our own bills in some cases. Senator Tom 
Harkin and I introduced a bill to require the disclosure of 401(k) fees 
to participants. A small difference in fees, compounded over a 
lifetime, can make a huge difference in overall savings. I commend the 
Labor Department for recently issuing regulations that will bring 
greater transparency and disclosure of 401(k) fees and make it easier 
for employers to ensure that their plans' fees are reasonable, and I 
look forward to reviewing the Department's participant fee disclosure 
regulations when they are issued this fall. Senators Bingaman, Isakson, 
and I have introduced the Lifetime Income Disclosure Act, which would 
have 401(k) statements translate the balance into a potential stream of 
retirement income. This will help participants save and plan for an 
adequate retirement. I am also working with my colleagues to ensure 
that oversight of the Pension Benefit Guaranty Corporation, the entity 
that insures the pensions of more than 44 million workers and retirees, 
is strengthened.
  Of course, we cannot talk about retirement security without talking 
about Social Security. The Aging Committee recently released a report 
that lays all the options on the table for making it secure over the 
long term. We also must make sure that those who rely on it the most 
are protected. Finally, one of the most important ways to have a secure 
retirement is to work longer. We are focused on the removal of barriers 
to working past retirement age for those who choose to do so. Our 
efforts will keep people in the labor force and encourage employers to 
offer the benefits and flexibility many are looking for later in life.
  In closing, I would like to applaud the many advocacy groups that are 
striving to create a universal, secure, and adequate pension system. 
Their efforts to bring necessary attention to the important issue of 
retirement security are appreciated. Together we will continue our work 
to improve retirement security for all Americans.
  Mr. HARKIN. Madam President, I rise today to speak out in support of 
Retirement USA's ``Wake Up, Washington!'' Month and to wake up my 
colleagues to the looming retirement crisis in this country. The public 
has already woken up. A recent survey found that 92 percent of adults 
aged 44 to 75 believe there is a retirement crisis in America. Now it 
is time for Congress to address this crisis before it is too late.
  We are already seeing the beginnings of the retirement crisis. Just 
look at all of the older Americans forced to delay retirement or go 
back into the workforce because of the economic downturn. If we do not 
change course, it is going to get much worse.
  Next year, the first baby boomers will turn 65, and it is clear that 
many are not prepared for retirement. According to the Employee Benefit 
Research Institute, nearly one-half of them are at risk of not having 
sufficient retirement resources to pay for basic retirement 
expenditures and uninsured healthcare costs.
  The picture is not any better for the rest of American workers. 
Thirty-one percent of workers do not have any retirement savings at 
all, and 43 percent of workers have less than $10,000. If those numbers 
are not sobering enough, the Center for Retirement Research at Boston 
College calculated America's retirement income deficit for Retirement 
USA. They estimate that the gap between what people need for retirement 
and what they actually have is $6.6 trillion. That is a scary number.
  There simply is no question that retirement is getting less and less 
secure in this country. In the past, people relied on the ``three-
legged stool'' of retirement security--private pensions, personal 
savings, and Social Security--but that stool has gotten awfully wobbly. 
Over 40 percent of workers lack access to any employer-sponsored 
retirement plan at all, the rising cost of living and stagnant wages 
are making it tougher for people to save, and our Social Security 
system is under attack.
  It used to be that many workers could rely on defined benefit 
pensions. Those plans are one of the best ways to ensure that workers 
have a secure retirement because they provide a predictable, guaranteed 
source of income that workers can count on for the duration of their 
lives. But, unfortunately, the traditional defined benefit pension is 
an endangered species. The number of employers offering these plans has 
fallen drastically over the past three decades. Now, less than 20 
percent of workers in the private sector have the security of a defined 
benefit pension.
  The vast majority of employees with any retirement plan at all just 
have a 401(k), but those plans do not provide real retirement security. 
They leave workers exposed to the constant risk that the plans' 
investments will perform poorly. Look at what has happened to people's 
401(k)s over the past few years. Billions of dollars of retirement 
savings have just evaporated, and lots of workers--especially people 
getting close to retirement--saw any chance they had of retiring vanish 
overnight. 401(k)s also do not provide workers with guaranteed lifetime 
income like traditional pension plans. That means that workers and 
their families are forced to bear the risk that they will outlive their 
retirement savings.
  Plus, in these troubled economic times, families are facing 
unprecedented challenges and saving for retirement just is not an 
option for many. Wages have been stagnant for years, yet the cost of 
living keeps going up. People are working harder and longer than ever 
before, but they still cannot seem to meet the costs of basic everyday 
needs, like education, transportation, and housing, let alone save 
enough to support them in their old age.
  For many Americans, the only retirement security they have is Social 
Security, but that, too, is under siege. There are those that want to 
privatize the system, cut back benefits, and raise the retirement age. 
They say that everyone should just work longer and that retirement is a 
``luxury.'' Clearly, those people do not swing a hammer for a living. 
They do not toil in our corn fields or work on our oil rigs. For 
Americans who work in these physically demanding jobs, working longer 
simply is not an option. A lifetime of hard work takes its toll, and at 
some point, a person just cannot do it anymore.
  We are facing a future where no one other than the rich will have the 
opportunity for a safe and secure retirement. People that work hard for 
their entire lives will find themselves teetering on the brink of 
poverty, unable to pay the basic costs of living. That is going to have 
drastic consequences for families and our country as a whole.
  It is time for our Nation to face the retirement crisis head on, and 
for our lawmakers to take aggressive action to protect future 
generations. We can start by working on some fixes for the current 
system. We need to shore up the Pension Benefit Guaranty Corporation, 
protect Social Security, and address the problems facing the Nation's 
corporate and multiemployer pension plans. We should also consider 
improvements to 401(k) plans like improved disclosures and lifetime 
income

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solutions. But all of those things are just short-term fixes.
  We need to go further. We need to work toward comprehensive reform of 
our retirement system. Americans who have worked hard and played by the 
rules deserve a secure retirement. They deserve to be able to enjoy 
their golden years, to spend time with their families, and to rest 
after a lifetime of hard work. We need to help people to work toward a 
secure retirement by expanding access to retirement plans, making it 
easier for workers to save, and finding ways to make sure they do not 
have to worry about outliving their savings.
  The retirement crisis is just too big to ignore, so as chairman of 
the Committee on Health, Education, Labor and Pensions, I am making 
retirement security a priority. The committee will be holding a series 
of hearings to explore the difficult issues surrounding retirement 
security, and I am hopeful that, together with my colleagues on both 
sides of the aisle, we will be able to come up with creative solutions 
to our Nation's retirement challenges.

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