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Archived News Release — Caution: Information may be out of date.
For more information call: 202/219-8211.
Labor Secretary Robert B. Reich today joined President
Clinton in seeking quick approval by Congress of a new law which could help
protect workers' 401(k) retirement plans.
"We need these new tools to make sure that when workers
put their money into retirement plans, it stays there until they retire and
doesn't go into somebody else's pocket," said Reich.
Reich commented after President Clinton wrote to Senate
Majority Leader Bob Dole earlier Thursday and urged Congress to approve the
"ERISA Enforcement Improvement Act." The proposed law would tighten audit
requirements by requiring auditors and 401(k) plan administrators who spot
problems to immediately notify the Labor Department or face fines of up to
$100,000.
The proposal was originally sent to Capitol Hill last
July, Reich said. "It's time for Congress to act on this legislation. I know
that all members of Congress will want to join us in doing everything possible
to protect retirement savings."
In the past year, the Labor Department's Pension and
Welfare Benefits Administration launched a nationwide crackdown against the
misuse of 401(k) money by some employers who have set up the plans for their
workers. More than 100 cases have been closed, more than $3.5 million have been
returned to workers and more than 300 other cases are still open.
"While the vast majority of 401(k)s are safe, there are
some problems out there and we're going to do all we can to make sure people
have this money for retirement. It's their job to save for retirement and it's
our job to protect those savings," Reich said.
See Attached Letter
The White House
Washington
Dec. 7, 1995
Dear Mr. Leader:
Since the beginning of this Administration, we have worked together
to protect the retirement savings of hard-working Americans. Last year,
Congress passed legislation proposed by the Administration that secured
the retirement promises made to over 40 million American workers in
traditional pension plans.
Now we must all act to ensure that the savings of the 22 million
American workers who put their hard-earned money into 401(k) plans are
safe. We need to make certain the government has the tools to assure
American workers they can put their savings -- and their trust -- into a
system that will be there when they need it most.
I urge you to swiftly approve legislation we sent to Congress in
July that would give both private auditors and the government new
strength and more effective tools with which to enforce the law and
prevent abuse of employee retirement savings by unscrupulous employers.
My Administration has consistently urged Americans to save for
their retirement -- a message echoed by financial planners, consumer
groups and virtually everyone who has considered this issue. But
Americans need to know their savings are safe if they are to follow this
sound advice.
While the vast majority of employers fully respect and protect
their employees' savings, some employers are abusing that trust. Last
week, the Department of Labor, which protects private pensions, urged
consumers to watch for warning signs to protect their 401(k)
investments. The Department of Labor's Pension and Welfare Benefits
Administration has begun a nationwide enforcement initiative that has
already uncovered the misuse of millions of dollars of contributions by
workers. Over $3.5 million has already been returned to workers; 310
investigations remain open, and more cases are coming.
On July 6, Secretary of Labor Reich transmitted to Congress the
"ERISA Enforcement Improvement Act." Our legislation would help in
early identification of potential abuses, strengthen pension plan
auditing and subject abusers to new penalties. Since July, we have
worked with members of Congress and the financial community to develop a
bipartisan consensus to protect our workers.
I am sure you agree with the 22 million Americans who place their
faith and trust in 401(k) plans that this is an issue of protection, not
partisanship.
I strongly urge you to give this important legislation your
immediate attention, and urge that it be enacted before the end of the
year. America's workers shouldn't be asked to wait a day longer.
Sincerely,
(s) Bill Clinton
The Honorable Bob Dole
Majority Leader
United States Senate
Washington, D.C. 20510
Archived News Release — Caution: Information may be out of date.
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