Americans Need the Flexibility and Freedom to Save
The topic of pension reform often is overlooked, but directly impacts virtually every working or retired American across the country. It’s a policy area that truly deserves our attention.
Especially considering the current instability of the economy, two separate and very serious issues are facing American workers.
The fees that workers pay on their 401(k) accounts can significantly impact their long-term savings, and transparency in those fees is a real concern on both sides of the aisle for me and my colleagues.
Unfortunately, Democrats aim to blame 401(k) fees for the substantial losses workers are seeing in their retirement accounts and have chosen to ignore the real culprit: a stock market that took a nosedive in the face of a continuing recession.
Again, this is a serious issue – one that is deeply impacting Americans from all walks of life, whether they are new parents establishing a college fund or workers preparing for retirement.
The downturn in the stock market should not be used as an excuse to enact controversial policies on 401(k) reporting and disclosure. To do so not only would be disingenuous, but also it threatens to do a disservice to the very people we are seeking to help.
On June 24, 2009, the Education and Labor Committee voted to mark-up H.R. 2989, the 401(k) Fair Disclosure and Pension Security Act of 2009, legislation introduced by Chairman George Miller (D-Calif.). The bill was reported favorably with a 29-17 vote. However, I did not support the proposal, because I saw the potential for harmful, unintended consequences that would limit options for workers.
Rather than respond to the broader losses in Americans’ savings plans, the bill offered a specific prescription for 401(k) reporting requirements and investment options.
The bill also required the “unbundling” of services for 401(k) plans for the purposes of voluminous new reporting. That would be despite the fact that experts have told us that unbundling actually could drive up costs for workers – the exact opposite outcome we’re trying to achieve. I offered an amendment to strike the unbundling title of the bill, but it was rejected along party lines.
I then joined my fellow Republicans to introduce the Savings Recovery Act, a bill that takes important first steps to help Americans begin to rebuild the savings they have lost.
Our bill gives Americans flexibility and freedom to save, while eliminating penalties that would make it harder to rebuild what has been lost.
We’ll raise contribution limits on retirement accounts, and we’ll stabilize pensions with a glide path for recognizing losses and additional time to boost funding.
We’ll make it easier for families to save for college, and we’ll get capital flowing again by temporarily suspending the capital gains tax on newly acquired assets. Finally, we’ll allow more Americans to increase their income by doubling the Social Security earnings limit.
The Savings Recovery Act is the product of a Republican Solutions Group that came together to address the very real concerns of Americans who have seen their nest eggs evaporate. We know that savings can’t be rebuilt overnight, but that’s no reason to ignore the challenges that families are facing.
I support sensible disclosure to make 401(k)s that are more transparent and understandable to workers. I do not support burdensome new regulations on business and limited choices for savings for employees.
Members on both sides of the aisle recognize that Americans need to be able to save for retirement. I hope we can find similar agreement on what steps should be considered to enhance current savings opportunities, rather than stifle them.