Compliance February 20, 2009

Hearings on Retirement Security, 401(k) Resurface

The market’s impact continues to weigh on the nation’s retirement security – and it seems that Congress wants to do something about it.
Reported by
On Tuesday, February 24th, the House Education and Labor Committee will begin a series of hearings to “explore the shortcomings of our nation’s retirement system and look at solutions to ensure that Americans can enjoy a safe and secure retirement after a lifetime of hard work.’
It’s the same committee, chaired by Congressman George Miller (D-California), that initiated a similar series of hearings last fall (see Congress Considers Market Impact on Retirement Security) – hearings that, following testimony from Dr. Teresa Ghilarducci, triggered concerns that the hearings were laying the groundwork for a campaign to undermine the availability or tax benefits of the 401(k). Subsequently, both Congressman Miller and Dr. Ghilarducci denied those intentions. In fact, in a response to a Wall Street Journal editorial on November 18, Miller said, “I do not support abolishing 401(k)s, forcing these plans into government programs, or changing their tax status. We must preserve and strengthen 401(k)s, not end them.’ (see The Plot to Kill the 401(k)).
However, those concerns might be reinvigorated with the new set of hearings; according to the committee’s website, the “first hearing will examine how the current economic crisis has highlighted existing weaknesses in the 401(k) retirement savings system.’
Testimony to the committee will be provided by:
  • Dean Baker, Co-director, Center for Economic and Policy Research
  • John C. Bogle, Founder, Vanguard Group
  • Alicia Munnell, Director, Boston College’s Center for Retirement Research
  • Paul Schott Stevens, President and CEO, Investment Company Institute
A day after the Education and Labor Committee hearing, the Special Committee on Aging will hold a hearing to examine, among other things, 401(k) lifecycle or target-date funds (see DC Plan Fee Disclosure Bill Introduced in U.S. Senate).

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