"The need for better retirement income security among working Americans can not be ignored if those currently in the workforce expect to maintain a comfortable standard of living in retirement," said Grassley, chairman of the Senate Committee on Finance.
The Retirement Security and Savings Act advances six goals to help jump start personal savings rates and participation in retirement income plans: increased opportunities to save with individual retirement accounts; expanded pension coverage for small business employees and the self-employed; enhanced fairness for women and families; increased pension portability; strengthened pension security and enforcement; and reduced regulatory burdens.
"Those of us at the policy tables can talk about the need for employees to prepare for retirement until we are blue in the face. Unless we give them the tools to build a better retirement nest egg, policy makers should be prepared for even greater challenges when retirees realize their retirement income falls short when they need it the most," Grassley said.
The economic engines on Main Street USA, small businesses provide millions of families with their livelihood. The complexity and expenses associated with the nation's pension laws act as a deterrent to small businesses from offering employee retirement plans, and many are unable to match employee benefit packages offered by big corporations, including employer-sponsored retirement plans. In 1995, only 50 percent of the work force was covered by a retirement plan, and coverage was thinnest among small businesses where fewer than 20 percent were offered coverage.
Grassley has been advocating pension reforms since 1997, when he introduced legislation to give pension participants and retirees tools to understand their plans and help ensure accuracy. In 1999, he introduced another bill to increase the pension counseling to millions of American workers. The Pension Coverage and Portability Act (S.741) introduced in 1999 by Grassley and Sen. Bob Graham laid the groundwork for the measure put forward today.
"Congress needs to clear the thicket of rules governing private pension plans. The system doesn't address the changing structure of today's workforce and leaves too many workers uncovered. For example, making pensions portable will address a disadvantage many workers, particularly women, face due to breaks in employment related to child care or family obligations. And, cutting cumbersome government red tape will help enable more smaller employers to offer a retirement plan to their employees," Grassley said.
Fifteen senators were original cosponsors of the bill introduced today by Grassley and Baucus. Grassley said he hopes to see the Senate act this year on the proposal. Similar bipartisan legislation has been introduced in the House of Representatives by Reps. Rob Portman and Ben Cardin (H.R.10).