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Archived News Release--Caution:
information may be out of date.
For more information call: 202-219-8211
In the next step of the Clinton Administration's program
to protect pensions, Secretary of Labor Robert B. Reich today announced a
Pension Payback program designed to make sure that the money deducted from
workers' paychecks is actually deposited to their 401(k) plans.
The program, which begins March 7 and ends Sept. 7, 1996,
gives employers a six-month grace period to contribute, with interest, funds
they deducted from employees' paychecks but failed to deposit in 401(k) plans
within required time periods. If they voluntarily come forward, they can avoid
criminal and civil penalties.
"Employers have six months to pay up painlessly," said
Reich. "As cops on the beat, our goal is not to collect fines. Our goal is to
get workers the money that's owed them as quickly as possible."
"This six-month grace period will, I believe, encourage
eligible employers who wittingly or unwittingly have misused their workers'
savings to come clean, restore all delinquent contributions and lost earnings,
and close the books."
The program will not be available to any of the employers
who are now under investigation. Nor can employers take part if the total
amount of unpaid participant contributions they owe is bigger than the
participant contributions withheld from workers' checks for calendar 1995.
During the last year, the Labor Department has opened over
600 investigations involving possible mishandling of 401(k) contributions. Over
$6 million have been recovered for workers so far, and more than 400 cases
remain open. Thirty-five criminal cases have been opened, four of which have
resulted in guilty pleas.
The Secretary emphasized that the vast majority of 401(k)
funds are secure.
"The 401(k) plans are a popular, portable way for Americans
to save for their retirement, and the vast majority are safe. The Clinton
Administration is committed to making sure they all are," Reich said.
More specific information concerning program eligibility
requirements and the notification process for participation may be obtained by
calling 202-219-4377 or writing the Pension and Welfare Benefits
Administration, U.S. Department of Labor, P.O. Box 77235, Washington, D.C.
20013-7235.
Archived News Release--Caution:
information may be out of date.
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