Pension Reform Plan Expected Today

President Clinton plans to unveil pension reform proposals today to make it easier both for small firms to set up retirement plans and for workers to take their pensions with them when they change jobs.

White House chief economist Joseph Stiglitz told the Concord Coalition anti-budget deficit group Wednesday that the proposed reforms would benefit the economy in both the short and long run.

“By reducing the costs of pension programs, we encourage firms to have more pensions . . . [and] increase the savings rate,” he said.

Stiglitz suggested the reforms might also make pensions more portable as workers change jobs more frequently than in the past. But he gave little in the way of details.

Clinton last month stressed the importance of pension reform as a way of assuaging Americans’ growing insecurity about their jobs--a concern that is likely to figure prominently in the upcoming presidential election campaign.

“We need to encourage companies--even the smaller businesses--to find ways to give the employees access at least to health care and to retirement,” Clinton said.

“We have to make it easier . . . for small businesses to take out pension plans for the owners and employees, and we have to develop some portability so people can carry those pension plans around,” he added.

He noted that an increasing number of people are changing jobs before they become vested in their firm’s pension plan.

According to the Small Business Administration, only 24% of businesses with fewer than 100 employees now offer pension plans.

Small-business owners say they cannot afford the administrative overhead or the cost of maintaining a retirement plan.

Last year, Rep. Rob Portman (R-Ohio) introduced legislation to make it easier for them to do so by reducing the regulatory burden.

As part of his balanced budget plan, Clinton has also proposed simplified pension rules for small businesses.