    [Public Papers of the Presidents of the United States: William J. Clinton (1996, Book I)]
    [May 23, 1996]
    [Pages 815-817]
    [From the U.S. Government Publishing Office www.gpo.gov]

    Message to the Congress Transmitting Proposed Retirement Savings
    Legislation
    May 23, 1996

    To the Congress of the United States:
        I am pleased to transmit today for the consideration of the Congress
    the ``Retirement Savings and Security Act.'' This legislation is
    designed to empower all Americans to save for their retirement by
    expanding pension coverage, increasing portability, and enhancing
    security. By using both employer and individual tax-advan-

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    taged retirement savings programs, Americans can benefit from the
    opportunities of our changing economy while assuring themselves and
    their families greater security for the future. A general explanation of
    the Act accompanies this transmittal.
        Today, over 58 million American public and private sector workers
    are covered by employer-sponsored pension or retirement savings plans.
    Millions more have been able to save through Individual Retirement
    Accounts (IRAs). The Retirement Savings and Security Act would help
    expand pensions to the over 51 million American private-sector workers--
    including over three-quarters of the workers in small businesses--who
    are not covered by an employer-sponsored pension or retirement savings
    program and need both the opportunity and encouragement to start saving.
    Women particularly need this expanded coverage: fewer than one-third of
    all women retirees who are 55 or older receive pension benefits,
    compared with 55 percent of male retirees.
        The Act would also help the many workers who participate in pension
    plans to continue to save when they change jobs. It would reassure all
    workers who save through employer-sponsored plans that the money they
    have saved, as well as that put aside by employers on their behalf, will
    be there when they need it.
        The Retirement Savings and Security Act would:

                Establish a simple new small business 401(k)-type plan--the
                National Employee Savings Trust (NEST)--and simplify complex
                pension laws. The NEST is specifically designed to ensure
                participation by low-and moderate-wage workers, who will be
                able to save up to $5,000 per year tax-deferred, plus
                receive employer contributions toward retirement. The Act
                would encourage employers of all sizes to cover employees
                under retirement plans, and it would enable employers to put
                more money into benefits and less into paying lawyers,
                accountants, consultants, and actuaries.

                Increase the ability of workers to save for retirement from
                their first day on the job by removing barriers to pension
                portability. In particular, employers would be encouraged no
                longer to require a 1-year wait before employees can
                contribute to their pension plans. The Federal Government
                would set the example for other employers by allowing its
                new employees to begin saving through the Thrift Savings
                Plan when they are hired, rather than having to wait up to a
                year. In addition, the Act would reduce from 10 to 5 years
                the time those participating in multiemployer plans--union
                plans where workers move from job to job--must work to
                receive vested benefits. It would also help ensure that
                returning veterans retain pension benefits and that workers
                receive their retirement savings even when a previous
                employer is no longer in existence.

                Expand eligibility for tax-deductible IRAs to 20 million
                more families. In addition, the Act would encourage savings
                by making the use of IRAs more flexible by allowing penalty-
                free withdrawals for education and training, purchase of a
                first home, catastrophic medical expenses, and long-term
                unemployment. It would also provide an additional IRA option
                that provides tax-free distributions instead of tax-
                deductible contributions.

                Enhance pension security by protecting the savings of
                millions of State and local workers from their employer's
                bankruptcy, as happened in Orange County, California. The
                Act would (1) require prompt reporting by plan
                administrators and accountants of any serious and egregious
                misuse of funds; (2) double the guaranteed benefit for
                participants in multiemployer plans in the unlikely event
                such a plan becomes insolvent; and (3) enhance benefits of a
                surviving spouse and dependents under the Civil Service
                Retirement System and the Railroad Retirement System.

                Ensure that pension raiding, such as that which drained $20
                billion out of retirement funds in the 1980s, never happens
                again--by retaining the strong current laws preventing such
                abuses and by requiring periodic reports on reversions by
                the Secretary of Labor.
        Many of the provisions of the Retirement Savings and Security Act
    are new. In particular, provisions facilitating saving from the first
    day on the job, in both the private sector and the Federal Government;
    the doubling of the multi-employer guarantee; and improving benefits for

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    surviving spouses and dependents of participants in the Civil Service
    Retirement System and the Railroad Retirement System deserve special
    consideration by the Congress. In addition, many of the provisions and
    concepts in this Act have been previously proposed by this
    Administration and have broad bipartisan support.
        American workers deserve pension security--as well as a decent wage,
    lifelong access to high quality education and training, and health
    security--to take advantage of the opportunities of our growing economy.
        I urge the prompt and favorable consideration of this legislative
    proposal by the Congress.

                                                          William J. Clinton

    The White House,

    May 23, 1996.