    [Weekly Compilation of Presidential Documents Volume 38, Number 9 (Monday, March 4, 2002)]
    [Pages 312-316]
    [Online from the Government Publishing Office, www.gpo.gov]

    <R04>
    Remarks to the National Summit on Retirement Savings

    February 28, 2002

        Thank you all very much. I appreciate that warm welcome. It's a
    pleasure to be here with friends and those who are promoting an
    important cause, and that is promoting the security and dignity of
    Americans who are in retirement.

    [[Page 313]]

        Americans can help secure their own future by saving. Government
    must support policies that promote and protect saving. And saving is the
    path to independence for Americans in all phases of life, and we must
    encourage more Americans to take that path.
        I want to thank the Secretary of Labor, Elaine Chao, for helping put
    on this conference, and I appreciate her service. I appreciate the
    Director of the Small Business Administration for being here; Hector,
    thank you for coming. It is good to see at least one fellow Texan, Sam
    Johnson. I appreciate you being here, Sammy; thank you for coming. And I
    appreciate Bill Roth, the former Senator from Delaware, for being here,
    as well. Thank you, Senator, for coming today.
        Just over a hundred years ago, at the turn of the last century, the
    average life expectancy in America was only 47 years. Today, that number
    has increased by three full decades. This amazing advance in the health
    of Americans is also profoundly changing our society. Americans who
    retire today may have decades--decades--of healthy life before them.
        This is time to volunteer, making seniors one of the greatest
    resources of compassion in America. This is time for family, to pass on
    values to grandchildren and to strengthen the bonds between grandparents
    and family members. And increasingly, retirement is a time of new
    beginnings, a time to travel and explore, a time to take up new hobbies,
    and a time to take up new careers.
        Some 80 percent of baby boomers--I happen to be one--[laughter]--say
    they plan to work at least part-time in retirement. And smart employers
    will be wise to use their experience and their competence.
        The choices seniors make in retirement should not be limited by
    arbitrary dates or obsolete stereotypes. Increasingly, the choices of
    seniors will only be limited by two things, the state of their health
    and the state of their savings.
        Because the nature of retirement is changing, the needs of
    retirement are changing, as well. Older Americans now require a
    retirement nest egg large enough for decades of enjoyment and ambition.
    As medicine increases the length of life, adequate savings must increase
    the options we have on longer lives.
        Saving is never easy; it's hard for some to do. But it's always
    worthwhile. Particularly when you think about the power of compounding
    interest. The power of compound interest is one of the great advantages
    of American citizens, and they must learn to use it. If a worker starts
    saving just $20 a week at age 22 and earns a 5.5 percent real interest
    rate on the investment, that adds up to a nest egg of nearly $180,000 by
    age 65.
        This summit was created by Congress to educate workers and citizens
    about the power and rewards of saving, and I want to thank you for
    participating. You've accomplished a great deal, but there's much more
    to do.
        Americans are saving too little, often dangerously too little. The
    average 50-year-old in America has less than $40,000 in personal
    financial wealth. The average American retires with only enough savings
    to provide 60 percent of his former annual income. This problem is
    especially acute for women and minorities.
        We must encourage, for all our people, the security and independence
    provided by savings. I want America to be an ownership society, a
    society where a life of work becomes a retirement of independence.
        Savings start as an individual responsibility, but Government can
    help by expanding the rewards of saving and by strengthening protections
    for saving. Last year, the Congress passed and I proudly signed powerful
    new incentives for retirement savings. Many of you in this room were
    involved in that effort, and I want to thank you.
        We relaxed the restrictions on how much workers can invest in their
    individual retirement accounts and 401(k) plans. Last year's tax relief
    plan allowed workers over the age of 50 to make overpayments to their
    retirement plans. This is especially important for women who take time
    out of the labor force to stay at home with their children.
        We passed some important reforms to give workers more choices and
    more rights. We created a new kind of 401(k) that allows workers to pay
    their taxes now and make tax-free withdrawals when they retire, just
    like

    [[Page 314]]

    the way the Roth IRA works. And we required companies to vest their
    employees' retirement rights more quickly. Your retirement money becomes
    yours faster, now more than ever.
        And finally, we made it easier to roll over retirement savings from
    one account to another. We know that American workers change jobs more
    frequently today than they used to. This means that people are seeing
    opportunity, and they're seizing it. But if workers are going to move,
    their retirement savings need to move with them without unnecessary
    bureaucracy and unnecessary paperwork.
        Thanks to the 2001 tax relief program, our Tax Code is now
    friendlier to saving than it has been in a long time. Not only am I
    proud of cutting taxes, I'm proud of reforming the savings, and I'm
    proud of the good work that Congress did on this matter.
        But there's still more to do. Even when people are saving enough,
    they need to feel more secure about the laws protecting their savings.
    In recent months, we've seen how workers can lose a lifetime's worth of
    savings if their company were to fail. So my administration has proposed
    reforms to make sure that the money Americans put away in their working
    years grows safely, so it is available in their retirement years.
        More than 40 million workers own 401(k) accounts totaling over $1.8
    trillion in assets. Many of these assets have been contributed by
    employers who match their workers' own savings. We know that employers
    contribute more when they have the option to give company stock as well
    as cash, and that option ought to remain as positive for American
    workers. But a worker should also have more freedom to choose how to
    invest their retirement savings.
        Companies that contribute stock to employee 401(k)s should not be
    permitted to lock their employees into owning that stock for years and
    years. My proposal will allow workers to sell company stock and
    diversify into other investment options after 3 years in their own
    company's plan. We need action to give workers the right to put their
    savings--to put their eggs in more than one basket.
        Another important reform addresses the issue of blackouts, times
    when employees are not free to change or access their retirement
    accounts. When companies black-out a pension plan, they temporarily take
    away a worker's freedom to choose for themselves. Workers should be
    given a 30-day notice before any blackout period begins, and company
    officers should not be allowed to sell their own company stock when
    workers cannot. What's fair on the top floor should be fair on the shop
    floor.
        To make good investment decisions, workers need sound advice and
    timely information. Employers should be required to provide updates on
    workers' retirement account values every 3 months. And we should change
    current law to remove the threat of lawsuits from employers who provide
    sound third-party investment advice.
        All these measures will help build faith in America's pension
    system, and I urge Congress to act. I want to thank Senators Tim
    Hutchison and Chuck Grassley, and Representatives Boehner, Portman, and
    Cardin, for their bipartisan efforts to put forward good, commonsense
    legislation that seeks to achieve many of these pension reform
    principles.
        Every American deserves to be an owner in the American Dream. That
    dream includes a sound pension plan and adequate private savings, and it
    is ultimately completed by Social Security reform. Some people like
    their Social Security exactly the way it is, and they'll be able to keep
    it exactly the way it is. But for younger workers who want to take
    advantage of the power of compounding interest, we should allow for
    personal retirement accounts.
        Today, Social Security is not a personal savings program. Retirees'
    benefits are paid directly from the taxes paid each year by current
    workers. The average return on Social Security is less than 2 percent.
    And in the long run, Social Security can pay retirees less than 30
    percent of what they earned before retiring, and that's not good enough
    as we head into the 21st century.
        We can do better, and a lot of people know this. Someone retiring
    today after 45 years of work would be entitled to a monthly benefit of
    $1,128 a month from Social Security.

    [[Page 315]]

    If that same retiree--if those Social Security taxes had been invested
    in the stock market over the last 45 years, during the same period of
    time, that person would now have a nest egg of $590,000, or income of
    more than $3,700 a month.
        Because there will be an expanding number of retirees for Social
    Security to support in the future, we must apply the power of savings,
    investing, and compound interest to the challenges of Social Security by
    introducing personal retirement accounts into the system. Americans
    would own these assets. After all, it is their money. They would see
    more retirement income, and that's necessary as people live longer
    lives. And as importantly, they would be able to pass these accounts on
    to their children.
        Franklin Roosevelt told the U.S. Congress in 1935 that his goals for
    Social Security included providing a secure retirement to American
    workers and making sure all Americans could build their personal wealth.
    We must dedicate ourselves to both those goals.
        At a time when older Americans have longer lives and more options
    than ever before, we need to ensure they have access not just to a
    monthly check but to personal wealth. And I mean all Americans, not just
    a few but all Americans, especially women and minorities who are often
    shortchanged by the current Social Security system.
        Robert Johnson, the CEO of Black Entertainment Television, explains
    it this way, ``African-Americans die earlier, therefore receiving less
    in the form of Social Security pay-outs. One of the ways to address this
    is through the use of wealth-generating private accounts that form part
    of an estate opportunity for African-Americans.'' And Lea Abdnor, a
    member of the President's Commission to Strengthen Social Security, as
    was Mr. Johnson, said, ``I believe very strongly that we have to give
    women the opportunity to create ownership and wealth for the first
    time.'' And I couldn't agree more.
        My administration is working to expand growth and opportunity in our
    economy. That's why we cut the taxes. And we've got to make sure
    opportunity is available as a result of people being able to own
    something, own their own money so they can manage it themselves, own
    their own portfolio, have the capacity to generate wealth. The
    generation of wealth should not be limited to a few in our society; it
    ought to be an opportunity for everybody. There's nothing better than
    providing the incentive to say, ``This is my asset base. I own it. I
    will live on it in retirement, and I will then pass it on to somebody in
    my own family.''
        If you own something in America, you own a stake in America's
    future. And a good retirement vision, a good retirement future says that
    we must reform Social Security, not only for the good of the system but,
    as importantly, for the good of American workers who work all their life
    so that they can have an asset base to call their own.
        So as you continue to meet, I hope that you will think not only
    about the short-term issues we face but how best to make sure that the
    retirement promises are kept, and how to make sure that as we devise--
    come up with new systems and new structures, that we fundamentally
    change America for the better, that we make the system open, and that
    opportunity extends its reach throughout every neighborhood. It is such
    a wonderful opportunity for the country, and I hope you join me in
    seizing it.
        I want to thank you for giving me the chance to come by. Elaine is
    right; I do worry about the security of the American people. I worry
    about the security of those who retire. And I want you to know every day
    I'm worried about the homeland security, too. Every day we wake up--I
    wake up and go into the beautiful Oval Office and read about threats to
    the United States. And it reminds me that the security of this country
    is my most important job.

        And I want to assure you all that our administration is doing
    everything that we possibly can to make sure innocent Americans do not
    lose their lives here at home. We're running down every lead. We're
    following every hint, every suggestion, every opportunity to chase down
    some possible clue of an attack. We are doing it. And I'm proud of our
    law enforcement officers at the Federal, State, and local level for
    their diligence.

        But I also want to remind you that in order to make sure the
    homeland is secure as it

    [[Page 316]]

    can possibly be for our children and grandchildren, that we must hunt
    down the killers and would-be killers, terrorists, Al Qaida terrorists,
    and bring them to justice. This is going to require more time than
    people may want. It's going to require a patient and determined nation.

        But having traveled around the country some, having had a chance to
    listen to the American people, I'm proud of the fact that our Nation is
    patient and is determined. Because our Nation understands that we fight
    for freedom, and any time our freedom is challenged, we stand strong in
    the face of those who would take away our freedom.

        Our military is making great strides. I'm proud of the U.S.
    military. And as fellow Americans, I will assure you that so long as I'm
    the President, I will do whatever it takes to protect the American
    people.

        I want to thank you for letting me come by. May God bless you all.

    Note: The President spoke at 1:23 p.m. in the Presidential Ballroom at
    the Capital Hilton Hotel. In his remarks, he referred to Robert L.
    Johnson, chairman and chief executive officer, BET Holdings, Inc.; and
    Leanne Abdnor, former executive director, Alliance for Retirement
    Security.