Cangress of the United State:
Washington, AC 20515

meme

May 3, 2010

The Honorable Hilda L. Solis i
Secretary

U.S. Department of Labor
200 Constitution Avenue, NW
Washington, DC 20210

The Honorable Timothy Geithner
Secretary

U.S. Department of the Treasury

1500 Pennsylvania Avenue, NW

Washington, DC 20210

Dear Secretaries Solis and Geithner:

As members of the Republican Savings Solutions Group, we write today to express our strong
opposition to any proposal to eliminate or federalize private-sector defined contribution pension
plans, such as 401(k)s, or impose burdensome new requirements upon the businesses, large and

small, who choose to offer these plans to their employees. |

In the Annual Report of the White House Task Force on the Middle Class, Vice President Biden
discussed at length the creation of so-called “Guaranteed Retirement Accounts, (GRAs)” which
would provide for protection from “inflation and market risk” and potentially “guarantee a
specified real return above the rate of inflation” — presumably at taxpayer expense. In the
Report, the Vice President recommended “further study of these issues.”?

The Vice President’s comments are troubling, insofar as they come on the heels of testimony
before Congress from supporters of GRAs proposing to eliminate the favorable tax treatment
currently afforded to 401 (k) plans, and instead use those dollars to fund government-invested
GRAs into which all employees would be required to contribute a portion of their salary — again,
with a government subsidy. These advocates would, essentially, dismantle the present private-
sector 401(k) system, replacing it instead with a government-run investment plan, the size and
scope of which remain to be seen. This despite data showing that 90 petcent of households have
a favorable opinion of the existing 401(k)/IRA system. i
In light of these facts, we write today to express our opposition in the strongest terms to any
effort to “nationalize” the private 401(k) system, or any proposal that would dismantle or
disfavor the private 401(k) system in favor of a government-run retirement security regime.
;
Similarly, and more recently, the Departments of Labor and Treasury have jointly issued a
“Request for Information” regarding the “annuitization” of 401(k) plans through “Lifetime
Income Options.” While we appreciate the Departments’ seeking guidance and information

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from all parties and stakeholders in advance of regulatory activity,
Departments not proceed with any regulation in this area before the?
thoroughly considered all of the information received.

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More specifically, we urge that the Departments take no action to m
often, small businesses — include a “lifetime income” or “annuitizat
offer a 401(k) plan to their employees, or that beneficiaries take sor

savings in such an option. Data shows that 70 percent of American:
mandated annuity or government payout of their 401(k) plan. On a

Congress should not be in the business of choosing “winners” and “
security stakeholders. Instead, we urge the Departments to make it
include retirement income solutions in their savings plans and to he)
the value of their retirement savings as a source of retirement incom
mandates and bureaucratic red tape from Washington push small e

of offering these plans to their employees, we would submit such at effort weakens, rather than

strengthens retirement security.

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We appreciate your consideration of our views in these important atts and stand ready to
work with you and the Administration to promote secure and adequate retirement savings for all

Americans.

Sincerely,

bcd

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Dave Camp
Member of Congress
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Member of Congress

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