BenefitsLink Newsletter 4/12/96 - Take #2
Here's a reformatted version of President Clinton's remarks yesterday
regarding the administration's pension proposals.
Several readers weren't able to read all of the the mailing of these remarks
made from BenefitsLink earlier today, due to email formatting problems; this
message has been reformatted and should come through OK for all this time.
(Famous last words <grin>.)
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I have proposed legislation to help these hard-working Americans. We call
it The Retirement Savings and Security Act. It expands coverage to help 51
million working Americans who are not now covered by an employer-provided
retirement plan. Very importantly, it increases portability, so workers can
take their retirement savings with them and keep saving if they change jobs
or lose their job and have to wait a time to find a new job. This also
enhances security so that retirement savings will be there when a worker
retires.
With The Retirement Savings and Security Act, we can help to make retirement
something Americans can look forward to, not dread. Where their
hard-working retirement earnings are concerned, we can give Americans peace
of mind. First, we ought to make it easier for small businesses like Sean's
-- I might say his is growing rather rapidly; Secretary Bentsen said he had
11 employees, Sean said, no, 13 -- (laughter) -- and, next month there will
be a couple more. We ought to make it easier for them and, indeed, for all
employers to provide pensions or other retirement plans. Right now,
three-quarters of the workers in large businesses have employer-provided
pensions, compared to only one-quarter of workers in small businesses. So
we would establish a new kind of 401K plan for employees of small
businesses. They could expand coverage with this provision alone by up to
10 million working Americans.
Second, we should expand IRAs. We want to double income eligibility so that
20 million more Americans earning up to $100,000 a year can take this tax
deduction. This would, first, raise the savings rate in America, and
second, make it possible for other family emergencies or needs to be met,
for our plan would allow IRA withdrawals for education and training,
first-time home purchases, major medical expenses, or during long-term
unemployment.
Third, we have to make these pensions portable. This could help more than 5
million workers every single year. It means workers in new jobs will not
have to wait to start saving in an employer pension plan. And we can start
at home. We will start by allowing federal workers to save from the first
day on the job. People would be able to keep saving through a 401K plan even
as they move from job to job. We will further ensure that veterans who
serve their country will not risk an interruption in their pension coverage.
And it will guarantee coverage and benefits for more union workers who
change jobs often, like those in the construction industries.
Fourth, we must continue to enhance pension security. We build on what we
have done to help secure pensions through tighter enforcement. Most
employers do play by the rules, but we must ensure that no employer can
easily skim from their employees' contributions. Our plan cracks down on
fraud, requires broader audits, and protects workers like those whose
pensions were threatened in the Orange County bankruptcy.
Finally, we should not go backward. As Secretary Rubin said, in the budget
plan that I vetoed, Congress permitted $20 billion to be taken out of
pension plans affecting -- excuse me -- in the 1980s, companies took $20
billion out of pension plans that affected something like 2.5 million
American workers. And in 1994 when I signed the legislation that Secretary
Rubin and Secretary Bentsen referred to, we were at that time looking at the
possibility that 8.5 million more American workers could lose their
pensions. So the '94 legislation clearly saved the pensions of 8.5 million
American workers and stabilized those of 40 million others.
Now, when the budget passed, part of it was giving a green light to
corporations to take $15 billion more out of pension plans. One of the
reasons I vetoed that budget -- one of several -- was that I do not believe,
after all the horrible experience of the '80s, and after what we went so far
to do in a bipartisan fashion in 1994 to stabilize the pension funds of the
country, that we ought to turn around and repeat the mistakes of the past.
Our first rule ought to be to do no harm in an age of opportunity and
uncertainty.
Now, I want to call on the Congress to help us move forward. In many of the
things that I have proposed today, there is very broad bipartisan support --
broad bipartisan support for making the 401K plans more readily available;
broad bipartisan support for an expanded IRA. We have to do the portability
piece of this. We have to do it. We have to create an environment where
ordinary working Americans can look forward to a future with excitement.
They'll say, hey, well, maybe I'll have to do more jobs than my parents and
grandparents did, but I'll always be able to get education and training,
I'll always be able to afford health care and have access to it, I'll always
be able to have a retirement plan for my later years. My family is going to
be all right in this new world.
That is what this legislation is all about. That's what retirement savings
and security means. I hope the Congress will join with us. I hope we can
pass all the elements of this plan, and we ought to be able to do it fairly
quickly because I do not believe there is a partisan issue here. This is
something we can and should do for America, and we ought to do it now.
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Best regards,
Dave Baker
benefits@benefitslink.com
BenefitsLink (national employee benefits Web site)
https://benefitslink.com