which have been documented by congressional hearings and investigations and in letters from constituents, some pension plans have miserably failed the intended beneficiaries.

We have documented cases where the lifetime labor and the hopes of American workers have been dashed because workers have been denied pensions because they changed jobs, were furloughed, the company for whom they worked was sold or went bankrupt, or for technicalities unknown to the employee. Also, there has existed a tremendous inequity in our tax laws which failed to grant incentives to individuals, not self-employed, whose employer did not have a pension plan, to enable them to establish their own program to achieve financial security in their retirement years. This bill then seeks to assure employees the pension that they rightfully expect and which they have earned, a simple matter of fairness and equity.

This legislation, which will encourage adequate private pension programs that will deliver benefits to the workers, hopefully will enable future retirees not only to achieve economic survival, but a degree of an economic comfort and security unknown to other generations of Americans.

H.R. 2 will help address the problems in the pension area by— First, establishing vesting standards to guarantee a worker a portion of his pension benefits. Under the bill, any employee who is at least 25 years of age would be enrolled in an employer pension plan if one existed;

The pension plan would have the option of using one of three vesting standard options. One of these options, the so-called rule of 45 is of concern to many of us in the Senate, because we were uneasy with respect to its impact on older workers. Many believe that this provision will serve to discourage the hiring of older workers. Committees of Congress must be vigilent in the monitoring of this option to make certain that this does not occur;

Second, providing for minimum funding standards to assure that each pension fund has funds sufficient to pay out anticipated benefits; Third, creating a Pension Benefit Guarantee Corporation to guarantee payments of benefits in the event of the termination of, such as company bankruptcy, of a pension plan;

Fourth, mandating tighter fiduciary or trustee standards to protect against mismanagement or misuse of pension funds;

Fifth, providing for disclosure of the features and operations of pension funds;

Sixth, increasing the tax incentives for the self-employed pension plans from the present lesser of 10 percent or $2,500 of salary to 15 percent or $7,500; and

Seventh, allowing for the first time individuals who do not belong to a pension plan to establish an individual retirement account for their own retirement. Such individuals will receive a tax deduction for these purposes equal to 20 percent of earned income or $1,500, whichever is lesser.

This legislation while not solving all the problems in the pension area, represents a giant step forward. Although the present bill does not, nor was it intended to, deal with the runaway inflation problem, I could not allow legislation dealing with pensions to pass without

pointing out the harsh and tragic impact that inflation has on all of our citizens, but particularly on retired citizens.

The pension reform legislation will assure that retirees receive their earned benefits. We must now make certain that these benefits are not eroded by inflation and that they will be worth something. We can do this by taking action to reduce and stop inflation, the No. 1 enemy of all of our citizens and this country.

Mr. BUCKLEY. Mr. President, I am pleased to join my colleagues in supporting this very important legislation. It has certainly long been needed. Nearly one-half of our working citizens are still unable to participate in private pension plans receiving favorable tax treatment. This unequal tax treatment will finally be removed by the Pension Reform Act, H.R. 2. Its provisions will change the tax laws to provide that all individuals not covered by an organized pension plan will receive the same tax treatment as those who are, and will therefore be able to set aside nontaxable funds to provide for their retired years.

In addition, the establishment of the Pension Benefit Guaranty Corporation and minimum standards to govern the nearly $185 billion in private pension funds will help insure that workers will not be denied the retirement income toward which they have contributed for many years because of corrupt or inept management, or the closing of a business. Thus, this bill is vitally important to the retirement security and well-being of millions of Americans.

There are other important aspects of this bill. It will, for example, help reduce the fires of inflation by promoting savings. But more importantly, it will slow, and perhaps help to reverse, the trend toward dependence on Government programs and checks; it will encourage individuals to take their own initiative to plan and save for their retirement years, rather than to passively and irresponsibility sit back and expect Government-and the taxpayer-to take full care of them in their old age.

Mr. President, while it contains some unfortunate provisions which may later be corrected, this is a good bill, one deserving of our strong support. I commend the distinguished chairmen of the Labor and Public Welfare and Finance Committees, my senior colleague, the members of the committees, and their staffs, for their extensive and fruitful work on this legislation.

SENATOR RANDOLPH PRAISES PENSION BILL, URGES CONFERENCE REPORT ADOPTION

Mr. RANDOLPH. Mr. President, the conference report pending in the Senate on H.R. 2, the "Pension Reform Act," is one of the finest legislative efforts we have seen during my years in the Congress.

H.R. 2 is a substantial work of great complexity. It is the product of four congressional committees working in harmony, and several years of dedicated effort on the part of several Senators and staff. Conferences among the Senate Committees on Labor and Public Welfare, and Finance, on the one hand, and the House Committees on Education and Labor, and Ways and Means, on the other, stretched over a period of some 18 weeks.

The measure before the Senate provides a sound foundation-a realistic promise for the retirement income security of America's work

ing people. It provides many new and detailed safeguards for participants in private pension plans which will help to assure that the promise of a pension-which today is only a promise for many thousands of working men and women-will be fulfilled.

Mr. President, Senators Williams, Javits, and Long have explained with thoroughness the major provisions of H.R. 2. I only add, although the measure does not go far enough for some, particularly in the area of portability, I am deeply gratified-and I believe that America's work force will be gratified-that this comprehensive bill includes laudable improvements in minimum standards for participation, vesting, funding, fiduciary requirements, registration, and plan termination insurance.

More than 3 years ago, on May 17, 1971, I said in the Senate that there was a desperate need for pension plan reform. In that statement I quoted from 1968 testimony by Assistant Secretary of Labor Thomas R. Donahue. I think it is appropriate to share with my colleagues a brief quotation from Mr. Donahue:

In all too many cases the pension promise shrinks to this: If you remain in good health and stay with the same company until you are 65 years old, and if the company is still in business, and if your department has not been abolished, and if you haven't been laid off for too long a period, and if there is enough money in the fund, and if that money has been prudently managed, you will get a pension.

Mr. President, it is my hope and expectation that the days of such uncertainty are numbered, and that millions of retiring working people will be able to look toward their golden years with assurance and security.

As a member of the committee of conference on H.R. 2, I am gratified with its accomplishments. As ranking majority member of the Senate Committee on Labor and Public Welfare, I am grateful for the foresight, intelligence, and leadership demonstrated over the last several years in the matter of pension reform by the able chairman, Harrison A. Williams, Jr. The Senate can likewise be grateful for the intensive effort of the ranking minority member, Jacob Javits.

Staff work on this difficult legislation has been dedicated and persevering. I particularly commend, from the Committee on Labor and Public Welfare, the efforts of Mario Noto, Robert Nagle, Michael Schoenenberger, and Michael Gordon. Each conferee on H.R. 2 is grateful for the competence of Dr. Laurence Woodworth, staff director of the Joint Committee on Internal Revenue Taxation, who led us through the tangle and complexity of this massive measure.

Mr. President, I urge the adoption of the conference report on H.R. 2, and further urge the President, on its adoption, to sign this truly landmark legislation into law.

The PRESIDING OFFICER. The hour of 1:45 having arrived, and the yeas and nays having been ordered on the conference report, the clerk will call the roll.

The clerk will call the roll.

Mr. ROBERT C. BYRD. I announce that the Senator from Alaska (Mr. Gravel), the Senator from Indiana (Mr. Hartke), the Senator from Louisiana (Mr. Johnston), the Senator from Wyoming (Mr. McGee), and the Senator from New Mexico (Mr. Montoya) are necessarily absent.

I further announce that the Senator from Maine (Mr. Hathaway),

and the Senator from Hawaii (Mr. Inouye) are absent on official business.

I further announce that, if present and voting, the Senator from Maine (Mr. Hathaway), and the Senator from Hawaii (Mr. Inouye) would each vote "yea.”

Mr. GRIFFIN. I announce that the Senator from Vermont (Mr. Aiken), the Senator from Tennessee (Mr. Baker), the Senator from Utah (Mr. Bennett), the Senator from New Jersey (Mr. Case), the Senator from Kentucky (Mr. Cook), the Senator from Arizona (Mr. Goldwater), and the Senator from Florida (Mr. Gurney) are necessarily absent.

I also announce that the Senator from Illinois (Mr. Percy) is absent on official business.

I further announce that, if present and voting, the Senator from New Jersey (Mr. Case), the Senator from Kentucky (Mr. Cook), and the Senator from Arizona (Mr. Goldwater) would each vote "yea.", The result was announced-yeas 85, nays 0, as follows:

Mr. MANSFIELD. Mr. President, I move to reconsider the vote by which the conference report was agreed to.

Mr. GRIFFIN. Mr. President, I move to lay that motion on the table. The motion to lay on the table was agreed to.

Mr. DOLE. Mr. President, the Senate's agreement today to the conference report on H.R. 2 is indeed an historic event. Following the House action of 2 days ago, our decision will mean that this long-overdue reform measure will very soon become public law-as the President has already expressed his unqualified approval.

ECONOMIC BILL OF RIGHTS

I do not feel that it is an overstatement to characterize this legislation as an "economic bill of rights." For it has been 15 years now since we have taken any action in the pension field, and during that time thousands of American workers have lost countless dollars through termination of their pension plan benefits.

Now, however, through vesting, limited "portability," and related concepts, nearly 35 million workers-many of them in the State of Kansas-will be guaranteed actual receipt of the benefits which they earn. The nearly $4.000 average loss suffered by the approximately two out of three "covered" employees who have really had no guaranteed entitlement will be a deplorable situation of the past.

NEW PROVISIONS

Besides liberalizing the self-employed or so-called Keogh plans, the employee Retirement Income Security Act will make it possible for the one-half of our working population who do not have the benefit of a pension plan to set up their own individual retirement plansand receive the same tax benefits as the others.

Instead of the present 10 percent, or maximum $2.500 annual setaside subject to tax deductions under a Keogh plan, this new pension law will allow 15 percent of earned income to be deducted-up to $7.500 a year. Moreover, the self-employed will now have essentially the same tax incentives for retirement savings as are reflected in most corporate pension plans.

BASIS FOR TAX TREATMENT

The basic motivation for offering or having private or company pensions lies in our tax law. That is, money which is paid into a retirement fund is tax free, and can be further invested without taxation to generate interest dividends, capital gains and the like.

For a person not covered by a regular pension plan, the tax free lim itation on contributions will be $1.500 a year or 13 percent of his earned income, whichever is lesser. He can subtract that amount from his gross income before paying taxes, and can utilize a wide variety of plans-including a special Government savings bond, manance con tracts, or an approved arrangement with a bank or trust company.