As President Franklin Roosevelt said, a secure retirement rests on a three-legged stool: Social Security, private pensions, and private savings. All of us --government, business, and individual Americans --must do our part to make sure that these three legs serve our people well into the next millennium.
Today, the President is joined by Vice President Gore, and the bipartisan leadership of Congress, in attending the SAVER Summit, which will address the need for greater savings and pension opportunities for the American people. The President will affirm that existing laws permit employers to automatically enroll new employees in 401(k) pension plans, unless they opt out.
The Need For Action. American workers generally need three elements to ensure financial security in retirement: (1) Social Security; (2) an employer-provided pension plan; and (3) personal retirement savings. Currently, Social Security is the sole source of income for 18 percent of all elderly Americans, and the primary source for two-thirds of all senior citizens. For over five years, the President has worked with Congress to expand pension coverage, make pensions more secure, and simplify pension plan administration. Despite these achievements, the personal savings rate among Americans remains too low, and many workers do not have pension coverage through their employers. Research shows that:
A New Effort to Increase Pension Coverage. At today's SAVER Summit, the President will announce that current law permits employers to structure 401(k) plans so that new employees are automatically enrolled unless they opt out. Under standard practice, employees are not enrolled in 401(k) plans unless they opt in. Automatic election into 401(k) plans would:
Building On A Record Of Initiatives To Increase Investment. Today's announcement builds on other initiatives that the President has called for in his budget plan, including: