Labor Secretary Elaine L. Chao Urges Senate Committee to Address Retirement Issues of Women

WASHINGTON – Secretary of Labor Elaine L. Chao today urged the Senate Committee on Aging to act on the pension reforms proposed by President Bush to help millions of Americans save for a more secure retirement. These reforms are especially important to women because their participation in retirement plans has risen significantly. Secretary Chao also calls on American workers – especially women – to take advantage of the President Bush’s tax law changes that improve retirement security and savings opportunity.

“In the last few decades, the lives of American women have been profoundly affected by social and economic changes in the retirement area,” said Chao. “President Bush’s proposal will help working women face a more secure financial future by strengthening 401(k) plans through new controls and rights.”

Women will reap special benefits under the provisions of the President’s proposal that:

· Help workers diversify their 401(k) portfolios by enabling them to transfer holdings of employer stock contributed by an employer after three years.

• Require employers to provide quarterly benefits statements with important educational information
• Prohibit corporate “insider trading” during black-out periods, and
• Provide access to professional investment advice from advisors acting solely in interest of workers.

Chao noted that women have made tremendous economic strides. More women are represented in the workforce overall than at any other time in history. Women are also a leading force in the American small business community, as women-owned firms have become the fastest-growing segment of the economy. Furthermore, the most recent surveys indicate that women are saving more and their pension balances are rising: the average woman’s 401(k) balance has moved from half to two-thirds that of men in the last ten years.

“Women need choice over how and where they invest, they need information to manage and control their investments, and they need to be confident that their savings are secure,” said Chao.

Chao also urges American workers aged 50 and older to save more for their retirement by making “catch-up contributions” as instituted by the 2001 tax law. These workers can make additional annual contributions to their (401) k accounts. These contributions are of particular importance to women who may have smaller accounts reflecting years with reduced earnings or out of the workforce. The new tax law also makes it easier for workers to roll over their retirement savings when they change jobs.

She commended the Senate Committee on Aging for examining the impact of economic changes on the retirement security of women. Chao also encouraged the committee to carefully weigh the President’s reforms as a way to help not just women, but all American workers save for a secure retirement.