Ferguson, Karen, Director, Pension Rights Center, Washington, DC Kelly, Peter M., Esquire, Murphy, Smith & Polk, Chicago, IL; Chairman, Qualified Plan Subcommittee and Member, Health and Employee Bene- fits Committee, U.S. Chamber of Commerce, on behalf of the U.S. Kraus, Stephen, Chief Counsel, Pensions, The American Council of Life Martinez, Hon. Matthew G., a Representative in Congress from the State Metras, Rita D., Director, Benefits Policy-Pension and Savings Plans, Eastman Kodak Company, Rochester, NY, on behalf of the Association of Private Pension and Welfare Plans Mishel, Lawrence, Director, Research, Economic Policy Institute, Wash- O'Connell, Daniel P., Corporate Director, Employee Benefits and Human Relations Systems, United Technologies, Hartford, CT, on behalf of Pierson, Dick R., President, Bee Line Motor Freight, Inc., on behalf of Multiemployer Pension Plan Solvency Coalition Pomeroy, Hon. Earl, a Representative in Congress from the State of Ray, James, Esquire, Connerton, Ray & Simon, Washington, DC, on behalf of the National Coordinating Committee for Multiemployer Sawyer, Hon. Thomas C., a Representative in Congress from the State Smalhout, James, Visiting Fellow, Hudson Institute, Author, Bethesda, Starr, ndi L., Deloitte & Touche, Pittsburgh, PA; Chair, Employee Benei.. Plans Committee, American Institute of Certified Public Ac- countants, on behalf of the American Institute of Certified Public Ac- Walker, David M., Global Director, Compensation and Benefits, Arthur Prepared statements, letters, supplemental materials, et cetera: Prepared statements, letters, supplemental materials, et cetera-Continued Erlenborn, Hon. John N., a Former Representative in Congress from Page 124 338 183 Ferguson, Karen, Director, Pension Rights Center, Washington, DC, prepared statement of 94 383 Gates, Gary I., Milbank Memorial Fund, additional material submitted for the record by "Its Your Business," transcript of part of a broadcast Kelly, Peter M., Esquire, Murphy, Smith & Polk, Chicago, IL; Chairman, 441 244 350 Martinez, Hon. Matthew G., à Representative in Congress from the State of California, prepared statements of: Kraus, Stephen, Chief Counsel, Pensions, The American Council of Life 355 417 June 6, 1996 June 26, 1996 213 Additional material submitted for the record by 375 Metras, Rita D., Director, Benefits Policy-Pension and Savings Plans, O'Connell, Daniel P., Corporate Director, Employee Benefits and Human Pension Benefit Guaranty Corporation, additional material submitted for the record by Pierson, Dick R., President, Bee Line Motor Freight, Inc., on behalf of Multiemployer Pension Plan Solvency Coalition, prepared statement of 292 Pomeroy, Hon. Earl, a Representative in Congress from the State of 216 Profit Sharing/401(K) Council of America, prepared statement of 434 Ray, James, Esquire, Connerton, Ray & Simon, Washington, DC, on behalf of the National Coordinating Committee for Multiemployer Plans, prepared statement of ... 300 Sawyer, Hon. Thomas C., a Representative in Congress from the State of Ohio, prepared statements of: June 6, 1996 180 June 26, 1996 285 Smalhout, James, Visiting Fellow, Hudson Institute, Author, Bethesda, 164 Starr, Randi L., Deloitte & Touche, Pittsburgh, PA; Chair, Employee Benefit Plans Committee, American Institute of Certified Public Accountants, on behalf of the American Institute of Certified Public Accountants, prepared statement of 261 Ugoretz, Mark J., The ERISA Industry Committee, prepared statement of Walker, David M., Global Director, Compensation and Benefits, Arthur 377 10 RETIREMENT CRISIS AHEAD? EXPLORING WAYS TO SIMPLIFY AND EXPAND PENSIONS THURSDAY, JUNE 6, 1996 HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON EM- The subcommittee met, pursuant to call, at 10 a.m., Room 2261, Rayburn House Office Building, Hon. Harris W. Fawell, Chairman, presiding. Members present: Representatives Fawell, Weldon, Graham, Martinez, Kildee, and Owens. Staff present: Peter Gunas, Professional Staff Member; David Frank, Professional Staff; Laurie Martin, Staff Assistant. Minority Staff: Richard Huberman, Legislative Associate; Maria Cuprill, Legislative Associate; and Ann Gillespie, Staff Assistant. Chairman FAWELL. The subcommittee will come to order. Today we begin hearings to look for ways to better protect and expand the retirement nest eggs of millions of hard-working Americans. The purpose of this hearing is to provide a forum for reviewing and discussing the current state of pension law-no small topic-and where it can be improved. We are starting from the premise that most Americans, and likely many in Congress, find our pension law and system confusing. We also presuppose our overly complex private pension system will assume primary importance for the retirement of baby-boomers. Our intent is to explore the forces that brought about the Employee Retirement Income Security Act of 1974, ERISA, the current forces impacting our pension system, and what future forces we will have to deal with to ensure a secure and growing pension system. All of us in Congress want to do all we can to help Americans enjoy security during their retirement years. In one of his familiar White House fireside chats back in the 1930s, President Roosevelt said, "We are moving to greater security for the average man than he has ever known before in the history of America. In many ways FDR is still right. Today, American men and women are more secure. They have become more secure in the world as nation after nation move toward a democratic model. They have become more secure with the incredible advances in medicine and technology. Unfortunately, however, all signs appear to indicate that Americans are headed for less secure ground when it comes to the quality of life and experience in retirement. (1) Our national savings rate has been falling for decades. We are all aware that changing work force demographics will put a tremendous strain on our social security system, and at the same time, participation in traditional employer-sponsored pension plans is falling. Concern is coming from all quarters. We have seen in the recent past, proposals for addressing some of the problems with our current pension system, from both Congress and the administration. The Small Business Job Projection Act, which just passed the House, contains pension simplification provisions which would make it easier for small employers to provide retirement savings plans for workers, but it is not without its problems or its critics. just read, Ms. Ferguson, your comments, and it caused me to do some real thinking. It was a good, bipartisan, nonpartisan set of comments. We all share these goals, and we all recognize that we also face long-term problems which have to be addressed, most notably how to secure a retirement system when millions of baby-boomers begin their golden years. Somebody said the other day they are not golden years, they are rusty years. It is not always easy. We made some steps, but we all agree there is a lot more to do. Today we call upon those who have drafted and studied and kept close watch on the law that governs the money our workers set aside to draw upon when they are ready to pass their jobs on to another generation. ERISA applies to every private employer-, union- and association-sponsored pension plan. The law is now more than two decades old. It has achieved many of its original goals, but like anything else, it is time to look and see if we can do any pruning to make it the best it can be. It is time to look where the law has worked, where it has fallen short, where it can be improved. ERISA was designed to ensure that people got what they had been led to believe they would get. To protect the interests of retirement plan participants and their beneficiaries, ERISA established a new set of rules for participation, for mandatory schedules for vesting, for minimum funding standards, for disclosing of information for standards of conduct for those administering the plans, and for ensuring the payment of pension benefits. Indeed, I wonder where our Nation's saving rates would be without ERISA. In many ways, it has been a great success. However, Congress' repeatedly amending the law has resulted in the overly complex and confusing system that we have today. The law needs to be reexamined and simplified. The focus of this hearing is to educate, to discuss the big picture, to look at the forces that brought ERISA about, and the forces currently acting upon our pension system and the forces we will have to deal with in the future to ensure a secure and growing system. Anything we in Congress can do to work in a bipartisan way to make the system to work better for American workers is what we want, and this is why we are holding these hearings. I look forward to the testimony that our distinguished panel of witnesses will be giving to us. I have had a chance to read almost all of them, and I think that there are some beautiful thoughts and ideas there. |