Statement of Senator Edward M. Kennedy on the Kennedy/Hatch Retirement Security Amendment

Statement of Senator Edward M. Kennedy on the Kennedy/Hatch Retirement Security Amendment
(As Prepared for Delivery)

We know that vast numbers of Americans are increasingly concerned about their economic future. More than half of all workers describe themselves as "worried" or "stressed" about the state of the economy, and growing numbers of workers fear that they won't be able to meet, much less surpass, the standard of living of their parents.

One of the primary factors contributing to these fears is the worsening crisis in the nation's retirement system. The cornerstones of retirement security - private pensions, private savings, and Social Security - are increasingly at risk. Far too many working Americans will face retirement with little in their pocket - and with nothing to show for their long years of loyal service and hard work.

The pension reform legislation enacted this year will help companies to keep the pension promises they've already made to workers, but we need to do much more to encourage employers to provide adequate retirement benefits to their hardworking employees. Today, less than half of all private sector employees have any retirement plan at all at work, and the number of workers with a secure defined benefit pension plan has been cut in half since 1980.

Employer-provided retirement plans are essential for retirement security for working families. Workers are far more likely to save money for retirement through an employer-offered pension than if they are left to save on their own.

Unfortunately, instead of encouraging more companies to provide good retirement benefits to their employees, current federal contracting rules actually discourage many private companies from helping their employees to save for retirement. The competitive bidding process for contracts favors private employers who shortchange their workers' on retirement benefits. Firms that provide no retirement benefits or only meager benefits often win bids to perform government work, even when the cost savings from their bid are attributable solely to the lack of retirement benefits they provide.

This unfair policy creates a dangerous race to the bottom, in which private sector companies compete against each other to see who can provide the fewest benefits to their workers. As a result, the bidding process is actually increasing the number of Americans whose retirement security is in jeopardy. That's both illogical and unconscionable.

In addition, this skewed privatization policy is fundamentally unfair to federal workers, who lose contracts simply because they receive decent benefits. Valued federal employees are losing their jobs because they can't compete on an unfair playing field with employers who are shortchanging their workers.

Defense workers are particularly at risk. Now this year alone, the Department of Defense is putting more than 10,000 civilian employees at risk of unfair termination - more than any other federal agency - and it has announced plans to increase this number in the future.
Thirty-five percent of civilian defense employees are veterans. Hundreds more are active reservists currently serving in the Iraq war. The least we can do for these dedicated and patriotic Americans is let them to compete on a level playing field to save the jobs they come home to after their service to our country.
The amendment that Senator Hatch and I are offering will protect these workers by preventing contractors from winning bids for government work solely because they provide inadequate retirement benefits to their employees - or no retirement benefits at all. Our goal is obvious—to protect hardworking federal employees from unfair competition. They shouldn't lose their jobs because they can't compete with private contactors on an un level
playing field.
The amendment does not dictate the retirement benefits that employers must provide or require contractors to change their existing benefits. It simply levels the playing field for federal employees and contractor employees by excluding costs related to retirement from a privatization review. All the Amendment does is prevent contractors from winning bids solely because they offer inferior retirement benefits.
The underlying bill already includes provisions to level the playing field for health care benefits, and we need to do the same for retirement benefits.
Our bipartisan amendment is an issue of basic fairness. It's fair to private sector workers who will otherwise lose their retirement benefits in a "race to the bottom." And it is fair to federal employees, who will otherwise lose their jobs to unfair competition. I strongly urge my colleagues to support our amendment.

http://kennedy.senate.gov/newsroom/press_release.cfm?id=fbdfe845-e351-4e80-bb67-871653af28db