| Feds to Defuse a Ticking
Time Bomb: The SAVER Act
H.R. 1377
America faces a ticking demographic time bomb that requires increased knowledge about savings and investments. As the first step in defusing the retirement time bomb, Congressmen Harris Fawell (R-IL) and Donald Payne (D-NJ), the Chairman and Ranking Member of the Subcommittee on Employer-Employee Relations of the Education and Workforce Committee, introduced bipartisan legislation, the Savings Are Vital to Everyone's Retirement (SAVER) Act.
Senator Charles Grassley (R-IA), Chairman of the Committee on Aging, is the sponsor of the SAVER Act in the Senate. The SAVER Act, H.R. 1377, initiates projects to educate America's workforce about retirement savings, and creates a National Summit on Retirement Savings.
The House passed the SAVER Act on May 21, 1997
and the Senate passed it on November 7. |
A survey released this year by the Employee Benefit Research Institute found that less than a third of Americans have even tried to calculate how much they will need to have saved by retirement, and that less than 20 percent are very confident they will have enough money to live comfortably throughout their retirement. The magnitude of the dilemma will only increase as the baby boomers reach retirement age. A leading obstacle to expanding retirement savings is the simple fact that far too few Americans have either the knowledge or the resources necessary to take advantage of the extensive benefits offered by our retirement savings system. The SAVER Act attempts to address this serious and underreported national problem.
The SAVER Act directs the Department of Labor (DOL) to maintain an ongoing program of education and outreach to the public through: (1) public service announcements, (2) public meetings, (3) creation of educational materials, and (4) establishment of a site on the Internet.
The information to be made available will include: a plain English description of the common types of retirement savings arrangements available to both individuals and employers, a means for individuals to calculate their estimated retirement savings needs, and an explanation for employers, in simple terms, of how to establish and run different retirement savings arrangements for their workers.
The SAVER Act also convenes a National Summit on Retirement Savings at the White House, cohosted by the executive and legislative branches, to be held by July 15, 1998 and again in 2001 and 2005. The National Summit would:
- advance the employee's knowledge and understanding of savings vehicles and facilitate the development of a broad-based, public education program;
- identify the barriers which hinder employee's from setting aside adequate savings for future needs and impede agencies from assisting their workers in accumulating retirement savings; and
- develop specific recommendations for legislative, executive, and private sector actions to promote retirement income savings among employee's and their agency.
The National Summit would bring together experts in the fields of employee benefits and retirement savings, key leaders of government, and interested parties from the private sector and general public. The delegates would be selected by the Congressional leadership and the President, and would represent the diversity of thought in the field without regard to their political affiliation. The National Summit would be a public-private partnership, receiving substantial funding from private sector contributions. |
