(2014-0226-F) 401(k) Plans, IRAs [Individual Retirement Accounts], and Defined Contribution Retirement/Pensions

The materials in 2014-0226-F are a selective body of documents responsive to the topic of the FOIA. Researchers should consult the archivist about related materials. FOIA request 2014-0226-F contains records dealing with improvements and developments in 401(k) plans, IRAs (Individual Retirement Accounts), and defined contribution retirement pensions that occurred during the Clinton Administration. Generally speaking, all of these features were expanded by President Clinton and received much in the way of favorable legislation. Specifically more people were afforded the opportunity for saving through the IRA in the Middle Class Bill of Rights in 1995 and the Retirement Savings and Security Act in 1996. The Savings and Investment Incentive Act of 1997 provided for further expansion of the IRA and allowed additional American workers the chance to set aside funds for retirement. During Clinton’s term in office 401(k) plans took off, with a considerably larger portion of the population seeing the need for pension coverage. Attractive provisions included the ability of employers to set up 401(k) plans in such a manner that new employees were automatically enrolled unless they chose to opt out and the reduction of the vesting period for employer 401(k) plans from five years to three. The development of simplified 401(k) plans acted as an incentive for small businesses to get involved in the retirement planning process. In the White House Office of Records Management (WHORM) Subject Files-General, there can be found correspondence, memoranda, drafts, speeches, and newspaper clippings focusing on the response of President Clinton to entreaties, queries, and developments involving 401(k) plans, IRAs, and pensions in general. One of his most frequent correspondents, the Savings Coalition of America, headquartered in Washington, D.C., emphasized the need for the average worker to benefit from any proposed legislation dealing with retirement savings plans. Clinton sent out a letter to 28 members of Congress urging them to support a bill providing for stiffer penalties for unscrupulous employers who misused 401(k) investments. Memos outline options for the President in the case of Senator Paul Coverdell’s education IRA proposal. The administration took a dim view of the bill, saying more should be done in the area of school construction and accusing Republicans of advocating a voucher plan that favored the rich and would divert much needed resources away from public schools. The White House Staff and Office Files of Domestic Policy Council Advisor Michael Schmidt contain memoranda, background materials, and press releases addressing Clinton’s Middle Class Bill of Rights and its impact on American working families. Expansion of the IRA would, in the words of the actual proposal, “help working Americans save for their future, give Americans more ways to save, afford tax relief to the middle class, and increase national savings.” According to these records, the changes in the IRA under discussion would take effect on January 1, 1996. The files of Joanna Slaney in Legislative Affairs are composed of transcripts, reports, emails, correspondence, Senate roll call votes, papers, articles, notes, and summaries largely relating to S.1134, better known as the Affordable Education Act of 1999. While most sections of the bill had bipartisan support, Coverdell’s IRA measure, also referred to as ESA’s (education savings accounts), met with fierce Democratic opposition in Congress and the threat of a veto by President Clinton. Records here outline the battle between the two parties, with proposed amendments by both sides listed and discussed in some depth. There is also a document entitled “Statement of Administration Policy – S.1134 – Affordable Education Act”. The Clinton Administration feared that this law would “reward many families, particularly those with substantial incomes, for what they may already do.” The files of National Economic Council Advisor Bob Shireman contain information about Senator Coverdell’s voucher amendment that President Clinton did not support. Taking the form of memoranda, Senate voting records, drafts of bills, charts, graphs, talking points, schedule requests, and press releases, they serve to document the manner in which the Clinton Administration responded to this piece of legislation championed by Republicans. The files of Maria Echaveste in the Office of Public Liaison contain a number of publications concerning a campaign to abolish the IRS code and newspaper and magazine articles about taxation. Specific items of interest would include a list of organizations belonging to the Savings Coalition of America, a paper outlining the reasoning whereby IRAs “should be universally available to all Americans,” and a folder loaded with records on 401 (kids), regarded by a staffer from the Office of the Vice President as “a public private initiative” intended to help kids in disadvantaged communities get a head start on financial planning and the promotion of good savings habits by acquiring the necessary math skills at an early age. Children in grades five through eight would be the primary targets of this group. The files of Peter O’Keefe in the Office of Public Liaison center on a meeting at the White House involving members of the Savings Coalition of America and Clinton Administration officials. Lists, correspondence, fact sheets, issue briefs, graphs, and charts detail all the particulars of the conference, which occurred in July 1997. A discussion of the advantages of expanding the IRA ensued between the two bodies, with specific attention being paid to the needs of the Baby Boomers and their rapidly approaching retirement years. Records from the Automated Records Management System and the Tape Restoration Project consist of emailed correspondence concerning the following topics: Pension Reform, Pension Protection, 401 (k), IRA, and the Pension Benefit Guarantee Corporation (PBGC). Email to and from Ellen Seidman specifically invoked the terms, 401(k) or IRA. Seidman served as the Special Assistant for Economic Policy from 1993 to 1997. A majority of the email collection consists of records concerning the Pension Benefit Guarantee Corporation (PBGC). According to the PBGC website, “[The] PBGC is a federal agency created by the Employee Retirement Income Security Act of 1974 (ERISA) to protect pension benefits in private-sector defined benefit plans - the kind that typically pay a set monthly amount at retirement. PBGC is headed by a Director who is appointed by the President and confirmed by the Senate. The Board of Directors consists of the Secretaries of Labor, Commerce and Treasury, with the Secretary of Labor as Chair. The Corporation is aided by a seven-member Advisory Committee appointed by the President of the United States to represent the interests of labor, employers, and the general public. ERISA outlines several specific responsibilities for PBGC's Advisory Committee, including advising on policies and procedures for PBGC's investments, the trusteeship of terminated plans, and on other matters as determined by PBGC.” Email concerning the PBGC consists of email related to the appointment of members, pension related meetings and discussions. The PBGC contributed to discussions concerning unfunded liabilities for the District of Columbia’s police, firefighter’s and teacher’s retirement programs. Further, the PBGC contributed to discussions concerning, SIMPLE and SAFE contribution plans, Pension Portability, Pension Simplification, and the “Employee’s right-to-know.”