President Clinton Announces Pension Security Steps
FOR IMMEDIATE RELEASE
March 31, 1997
TODAY, PRESIDENT CLINTON WILL RELEASE THE PENSION BENEFIT GUARANTY CORPORATION'S (PBGC) ANNUAL REPORT TO CONGRESS -- SHOWING A SURPLUS FOR THE FIRST TIME IN PBGC'S 22-YEAR HISTORY. The Report shows a year-end financial surplus of $869 million, based on assets of more than $12 billion and liabilities of nearly $11.2 billion. The Annual Report should reassure the 42 million working men and women whose pensions are protected by PBGC.
- In 1994, President Clinton signed the Retirement Protection Act, which put in place numerous pension reforms, including strengthening funding rules for underfunded plans and enhancing PBGC's compliance authority.
- Due in part to these reforms, the PBGC, under the leadership of Martin Slate, erased a deficit that reached nearly $3 billion in 1993.
- Strong financial management has spared taxpayers a potential loss of millions of dollars.
PRESIDENT CLINTON PROPOSES AUDIT REFORM TO ENHANCE PENSION SAFEGUARDS. President Clinton's initiative -- which he also proposed last year -- will improve pension security for millions of American workers by:
- Closing a loophole that permits $950 billion in pension plan assets to escape meaningful audit, affecting 22 million workers;
- Requiring prompt reporting if criminal acts are discovered during an audit; and
- Assuring that only qualified professionals conduct audits of ERISA plans.
PRESIDENT CLINTON ANNOUNCES OTHER PENSION SECURITY STEPS:
The PWBA's 401(k) Enforcement Project Passes $20 Million Mark. The number of 401(k) plans has grown enormously in recent years (from 17,000 in 1984 to 154,000 in 1993). While the vast majority of these plans are safe, the Administration has stepped up enforcement against those employers who spend or borrow their employees' pension contributions. In just two years, the Pension and Welfare Benefits Administration's 401(k) Enforcement Project has recovered over $20 million for more than 40,000 employees across the country. Today, the Administration Starts a New Toll-Free Pension Hotline -- 1-800-998-7542. Today, the Labor Department initiates a toll-free number to provide pension information to workers. Sixteen publications, such as "Protect Your Pension" and "What You Should Know About Your Pension Rights," are available to individuals through this number. This will help pension plan participants understand their rights and identify early warning signs of pension problems. New Rules Will Put Pension Money To Work for Participants Sooner. Final rules went into effect last month requiring employers to deposit employee contributions into pension plans as soon as possible, but no later than 15 business days after the end of the month during which the contribution was made. It is estimated that this change will increase earnings for participants and beneficiaries by an average of $70 million per year over the next ten years.
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PBGC No. 97-033197