Bush pushes pension proposal

Associated Press

WASHINGTON — With Enron Corp. on everyone’s mind, President Bush on Thursday decried pension practices that create different standards for executives and workers.

"What’s fair on the top floor should be fair on the shop floor," Bush told the National Summit on Retirement Savings.

Bush went to the Labor Department-sponsored event to promote his plan to let workers put some of their Social Security earnings into personal retirement accounts.

As Bush spoke, Social Security Administration Commissioner Jo Anne Barnhart told a House panel that the certificates some Republicans want to send to all retirees reassuring them about future benefits could backfire. The certificates apparently would have no real value.

"I’m concerned about possible unintended consequences, such as creating undue alarm, particularly among those who are nearing retirement age but don’t receive a written notice," Barnhart told the House Ways and Means Social Security subcommittee.

Bush said he wants an end to pension practices brought to light by the collapse of the Texas energy giant. The head of the Pension Benefit Guaranty Corp. said Wednesday that an Enron pension plan is seriously underfunded and the government might have to absorb the cost of guaranteed benefits.

"Companies that contribute stock to employee 401(k)s should not be permitted to lock their employees into owning that stock for years and years," Bush said. "Company officers should not be allowed to sell their own company stock when workers cannot.

"Even when people are saving enough, they need to feel more secure about the laws protecting their savings," Bush said. "In recent months, we’ve seen how workers can lose a lifetime’s worth of savings if their company were to fail."

Federal Reserve Chairman Alan Greenspan said at the gathering that the law now calls for Social Security benefits to be reduced to a level that could be financed only from the program’s current receipts if its trust fund were exhausted.

Greenspan, who headed a Social Security commission that was influential in reforming the program in the early 1980s, said he could not envision a scenario "in which full payment of benefits will not be forthcoming." But he also asked: "Does anyone doubt that Congress would prevent benefits from being curtailed if the trust fund were depleted?"

Under current projections, Social Security will have to start dipping into its trust fund to pay benefits in 2016. That year is pinpointed as the time when baby boomer retirements will raise demand for Social Security benefits above the amount collected in Social Security payroll taxes.

The current projection is that the trust fund will be totally depleted in 2038 unless Congress overhauls the program.

The Bush administration would like to revamp Social Security through personal retirement accounts that could be invested in the stock market. But at the request of Republican lawmakers, the administration is not pushing for that issue to be debated in Congress until after the November congressional elections.

Bush told the conference that someone retiring today after 45 years of work could expect a monthly Social Security benefit of $1,128. If that same worker’s Social Security taxes had been invested in the stock market during his or her 45 years on the job, that monthly benefit would more than triple.

"Americans would own these assets," Bush said. "After all, it is their money. They would see more retirement income, and that’s necessary as people live longer lives."