U.S. Chamber Says Pension Reforms Must Encourage 401(k) Participation, Safeguard Retirement Security

WASHINGTON, D.C. — The United States Chamber of Commerce today urged the Bush administration and lawmakers to ensure that post-Enron pension reform proposals safeguard workers' retirement security, by encouraging employers and employees to participate in 401(k) and similar retirement savings plans.

"Targeted reforms may be necessary, but we cannot afford to reform the system out of existence," said Kathleen Havey, U.S. Chamber director of pension policy.

"The danger is that we go too far. Over-regulation of a private, voluntary pension system will only cause employers to curtail benefits or stop coverage altogether and result in less pension coverage for workers."

A leader of the newly formed Coalition on Employee Retirement Benefits, the Chamber is reviewing President Bush's four-point pension reform plan and other legislative proposals. At the same time, the Chamber is urging policymakers not to make hasty changes to worker retirement and investment plans before it completes a full investigation of the misconduct at Enron.

"We encourage the administration and Congress to move forward aggressively with their investigation of Enron, punish the guilty, and adopt any necessary reforms," said Havey. "But if there is an election-year rush by politicians to take actions that would jeopardize the 42 million Americans who participate in a 401(k) plan, the Chamber will be the first to oppose such actions."

Employers voluntarily provide retirement benefits to 90 million American workers — over and above their Social Security contributions. Defined-contribution plans, such as 401(k)s, have become the mainstay of the private retirement system. More than 42 million workers participate in 401(k) plans, holding nearly $2 trillion in assets, accumulating wealth that supplements company pensions and Social Security.

The U.S. Chamber of Commerce is the world's largest business federation, representing more than three million businesses and organizations of every size, sector and region.

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02-16