WASHINGTON, D.C. | June 24, 2009
Thank you, Chairman Miller and good morning. We’re here today to look at a bill that could have widespread consequences for millions of current and future retirees. It deserves a serious debate, and I hope that’s what we’ll give it.
As I understand it, H.R. 2989 is a combination of two bills we looked at in subcommittee last week, with the notable addition of some limited defined benefit reforms for both single and multiemployer pension plans, which have not received the same legislative review.
Let me begin with Chairman Miller’s proposal for 401(k) reform. In name, his legislation is about disclosure. It’s a concept we support on this side of the aisle, and we’re willing and eager to look at proposals that will make useful, understandable, and meaningful information available to Americans who save through a defined contribution plan.
What we do not support is disclosure that has no real value, or worse, that has the potential to actually harm workers.
The proposal that moved through the subcommittee last week picks winners and losers among service providers, favoring one segment of the industry and one particular type of savings vehicle over others. It’s a dangerous role for the federal government, and I worry that it could ultimately limit choices and drive up costs for consumers.
Speaking of consumers, I’d like to turn to the investment advice proposal offered by my good friend Mr. Andrews. As members of this committee know, one of the most pro-consumer pension reforms enacted in the last decade is the investment advice component of the 2006 Pension Protection Act.
The Pension Protection Act made it easier for employers to offer individualized investment advice to their workers. Especially in a troubled economy, many workers are looking for help from a qualified advisor.
Unfortunately, the legislation before us wipes out those provisions of the PPA, making it much more difficult for employers to offer this important benefit.
But the bill doesn’t stop there. Not only does it erase the progress made by the Pension Protection Act, it actually undercuts the investment advice protections that existed before PPA, limiting options for consumers even further.
Again, this is a case of picking winners and losers in the investment industry by imposing draconian limitations that will make virtually all service providers ineligible to provide advice.
The final element of this bill has been described as a “placeholder” for defined benefit relief that will be crafted at some point in the future.
With all due respect, if we’re planning to craft a funding relief proposal, we ought to do so before the bill gets a vote in Committee – not after.
Republicans share the goal of improving retirement savings options for workers. In fact, we want to improve options for all kinds of savings, not just retirement.
In April, for example, we proposed the Savings Recovery Act. This bill helps families protect what retirement, college, and personal savings they have – and rebuild what they have lost – by giving them more freedom and flexibility to save more. It also provides for meaningful relief for defined benefit plan sponsors, who – in light of last year’s economic downturn – so desperately need it.
Members on both sides of the aisle raised serious concerns about the bills that make up this legislation when the subcommittee met last week. To me, that sends a signal that perhaps this bill is moving too quickly. At a minimum, I hope Members on both side of the aisle will have the opportunity to amend the bill today and address some of its serious shortcomings.
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