[Public Papers of the Presidents of the United States: George W. Bush (2006, Book II)]
[August 17, 2006]
[Pages 1521-1523]
[From the U.S. Government Publishing Office www.gpo.gov]



Remarks on Signing the Pension Protection Act of 2006
August 17, 2006

    Thank you. Please be seated. Thanks. Welcome to the White House. 
We're glad you're here. In a few moments, I will have the honor of 
signing the most sweeping reform of America's pension laws in over 30 
years, the Pension Protection Act of 2006. And we welcome you here to 
witness the signing.
    Americans who spend a lifetime working hard should be confident that 
their pensions will be there when they retire. Last year, I asked 
Congress to strengthen protections for the pensions of our workers. 
Members of both parties came together to pass a good bill that will 
improve our pension system, while expanding opportunities for Americans 
to build their own nest eggs

[[Page 1522]]

for retirement. And I'm really pleased to sign this bill into law.
    I want to thank two members of my--three members of my Cabinet who 
have joined us today: Secretary of Treasury Hank Paulson, Secretary of Labor Elaine Chao, and the Director of the OMB Rob Portman. As an aside, while Portman served in Congress, he was 
the principal author of some of the important provisions of this bill.
    I also want to welcome Members of the United States Senate and the 
House of Representatives here. I welcome Senator Mike Enzi, who is the chairman of the Health, Education, 
Labor, and Pensions Committee. I welcome Senator Blanche 
Lincoln from Arkansas. I welcome 
Congressman John Boehner, House majority 
leader, who was instrumental in getting this bill passed; along with 
Buck McKeon, who's the chairman of 
the Education and Workforce Committee, Congressman Bill Thomas, chairman of the Ways and Means Committee, 
Congressman John Kline of Minnesota. Thank you 
all for coming. Thanks for coming back from your vacations.
    Many Americans work for private companies that offer traditional 
pensions, and most of those companies are meeting their obligations to 
their employees and their retirees. Yet, some businesses are not putting 
away the cash they need to fund the pensions they promised to their 
workers. These companies get into financial trouble and go bankrupt; 
their underfunded pension plans can leave some retirees with checks much 
smaller than the ones they were promised.
    The Federal Government has created an insurance system for 
businesses offering private pensions, and that insurance is funded by 
premiums collected from these employers. When some businesses fail to 
fund their pension plans and are unable to meet their obligations to 
their employees, it puts a strain on the entire system.
    And if there's not enough money in the system to cover all the extra 
costs, American taxpayers could be called on to make up the shortfall. 
Every American has an interest in seeing this system fixed, whether 
you're a worker at a company with an underfunded pension or a taxpayer 
who might get stuck with the bill.
    The Pension Protection Act of 2006 will help shore up our pension 
insurance system in several key ways. It requires companies who 
underfund their pension plans to pay additional premiums. It extends the 
requirement that companies that terminate their pensions must provide 
extra funding for the system. This legislation insists that companies 
measure their obligations of their pension plans more accurately. It 
closes loopholes that allow underfunded plans to skip pension payments. 
It raises caps on the amount that employers can put into their pension 
plans so they can add more money during good times and build up a 
cushion that can keep pensions solvent in lean times.
    Finally, this legislation prevents companies with underfunded 
pension plans from digging the hole deeper by promising extra benefits 
to their workers without paying for those promises up front. The problem 
of underfunded pensions will not be eliminated overnight. This bill 
establishes sound standards for pension funding, yet in the end, the 
primary responsibility rests with employers to fund the pension promises 
as soon as they can.
    The message from this administration, from those of us up here 
today, is this: You should keep the promises you make to your workers. 
If you offer a private pension plan to your employees, you have a duty 
to set aside enough money now so your workers will get what they've been 
promised when they retire.
    In addition to reforming the laws governing traditional private 
pensions, the bill I signed today also contains provisions to help 
workers who save for retirement through defined contribution plans like 
IRAs and 401(k)s. These savings plans are helping Americans build a 
society of ownership and financial independence.

[[Page 1523]]

    And this legislation will make it easier for workers to participate 
in these plans. It will remove barriers that prevent companies from 
automatically enrolling their employees in these savings plans, ensure 
that workers have more information about the performance of their 
accounts, provide greater access to professional advice about investing 
safely for retirement, and give workers greater control over how their 
accounts are invested.
    Finally, this bill makes permanent the higher contribution limits 
for IRAs and 401(k)s that we passed in 2001, and that will enable more 
workers to build larger nest eggs for retirement.
    To ensure more secure retirement for all Americans, we've got more 
work to do. We must also prepare for the impact of the baby boomer 
generation's retirement, and what that impact will have on Federal 
entitlement programs like Social Security and Medicare. As more baby 
boomers stop contributing payroll taxes and start collecting benefits--
people like me--it will create an enormous strain on our programs. 
Entitlement programs are projected to grow faster than the economy, 
faster than the population, and faster than the rate of inflation. If we 
fail to act, spending on Social Security and Medicare and Medicaid will 
be almost 60 percent of the entire Federal budget in the year 2030. And 
that's going to leave future generations with impossible choices: 
staggering tax increases, immense deficits, or deep cuts in benefits.
    We have an obligation to confront this problem now. The Secretary of 
Treasury understands what I'm telling 
the Congress: Now is the time to move; now is the time to do our duty. 
I'm going to continue to work with the Congress and call on the Congress 
to work with the administration to reform these programs so we can 
ensure a secure retirement for all Americans.
    Today we've taken an important step toward ensuring greater 
retirement security for millions of American workers. I want to thank 
the House and the Senate for their good work on this vital legislation. 
It's been hard work. It took a lot of pages to write that bill, as you 
can see. [Laughter] But the Members did good work, and now I'd ask them 
to join me as I sign into law the Pension Protection Act of 2006.

Note: The President spoke at 1:13 p.m. in Room 450 of the Dwight D. 
Eisenhower Executive Office Building. H.R. 4, approved August 17, was 
assigned Public Law No. 109-280.