Statement on Pension Reform Legislation,
August 4, 2006

After a lifetime of work, American workers have earned the opportunity to enjoy a secure retirement. Last year, I asked Congress to strengthen protections for workers’ pensions. Congress has now delivered the most comprehensive reforms to America’s pension system in over 30 years.

This legislation sets the right target for pension plan soundness: 100 percent funding of all promises. It would allow employers to put more money into their pension plans during good times, building a cushion that can survive lean times. Congress has also acted to make it harder in the future for employers with underfunded pension plans to promise additional benefits to their workers without funding those new promises.

These measures will provide workers with better information about their pension plans, eliminate loopholes that interfere with strong pension funding, and increase the accuracy of pension plan measurements. The bill would reform the rules governing employer funding and premium contributions to strengthen the pension insurance system.

The legislation also contains provisions to help workers who save for retirement through defined contribution plans. The legislation will make it easier for workers to participate in such savings plans by removing regulatory barriers to automatic enrollment. It also gives workers more information about how their accounts are performing and greater control over how their accounts are invested. Workers will be allowed greater access to advice about how to safely invest for retirement. And finally, the bill will enable more workers to build larger retirement nest eggs, by making permanent higher allowed contribution amounts in IRA and 401(k) plans.

I look forward to signing this important legislation into law soon.

Note: The statement referred to H.R. 4. This item was not received in time for publication in the appropriate issue.