The Oversight and Government Reform Committee today announced that the hearing on hedge funds previously scheduled for Thursday, October 16, 2008, has been rescheduled for Thursday, November 13, 2008. The Committee has postponed the hearing in order to accommodate the schedules of witnesses.

I Normal 0 false false false MicrosoftInternetExplorer4 st1\:*{behavior:url(#ieooui) } /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-parent:""; mso-padding-alt:0in 5.4pt 0in 5.4pt; mso-para-margin:0in; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:10.0pt; font-family:"Times New Roman"; mso-ansi-language:#0400; mso-fareast-language:#0400; mso-bidi-language:#0400;} n an effort to help rebuild seniors’ retirement savings, U.S. Rep. George Miller (D-CA), chairman of the House Education and Labor Committee, and Rep. Rob Andrews (D-NJ), chairman of the Subcommittee on Health, Employment, Labor and Pensions, called on U.S. Treasury Secretary Henry Paulson to suspend a tax penalty for seniors who do not take a minimum withdrawal from their depleted retirement accounts, such as 401(k)s.

 

Miller and Andrews also announced that they will push to enact legislation based on H.R. 7242 that would suspend the tax penalty for seniors who have saved less than $200,000 in their retirement accounts. That bill was introduced on October 2, 2008 by Rep. Andrews.

 

“American workers have already seen at least $2 trillion disappear from their retirement accounts,” said Rep. Miller. “Now is the time to act. Seniors have seen their retirement accounts decimated and need immediate relief.”

 

Current regulations require account holders of 401(k)-type account to withdraw a minimum amount of money every year after they reach 70 ½ years old. If seniors do not take out a minimum amount based on an Internal Revenue Service formula, they are subject to a 50 percent penalty. For instance, if an individual fails to withdraw $4,000, they would be assessed a $2,000 tax the next year.

 

However, as a result of the financial crisis, many seniors have seen their savings evaporate. At an Education and Labor Committee hearing this week on the impact of the financial crisis on retirement security, the Congressional Budget Office found that $2 trillion has disappeared from Americans’ retirement plans over the past 15 months.

 

For more information on the hearing on the financial crisis’ impact on retirement savings, click here.

 

The full text of the letter is below.

# # #

 

October 10, 2008

 

 

The Honorable Henry M. Paulson, Jr.

Secretary

U.S. Department of the Treasury

1500 Pennsylvania Avenue, NW

Washington, DC  20220

 

Dear Secretary Paulson:

 

As a further step to address the current financial crisis, we request that you take immediate action to help senior citizens preserve their retirement investments.  Specifically, we request that you suspend the required minimum distribution (RMD) and the tax penalty for retirement account holders who are 70 years or older who might not want to withdraw from their retirement accounts during the current financial crisis. 

 

As you know, seniors who fail to take the RMD have to pay a tax penalty equal to 50% of the amount that should have been distributed.  Unless this provision is temporarily suspended, seniors will be doubly penalized by the current crisis – first by experiencing a dramatic drop in the value of their retirement account holdings and second by forcing them to sell a portion of those holdings at a steep loss. 

 

American workers have lost $2 trillion in retirement savings over the past 15 months, according to the Congressional Budget Office.  This estimate that underscores the fact that retirement security is one of the greatest casualties of the present crisis. 

 

We believe that you have the legal authority to effectively eliminate this penalty by not requiring the RMD for 2008.  Current law requires minimum distributions over the life of the retiree.  However, the Treasury regulations interpret this as requiring annual distributions.  By taking action, seniors will avoid taking unnecessary losses in their retirement accounts and avoid the current excise tax.  We request that you take this action immediately to help protect and rebuild the retirement savings of older Americans.

 

Sincerely,

 

 

GEORGE MILLER                                                  

Chairman                                                                    

 

ROBERT E. ANDREWS

Subcommittee Chairman

Health, Employment, Labor, and Pensions

 

 

 

 

FOR PRESS INQUIRIES
Contact: Aaron Albright / Rachel Racusen
2181 Rayburn House Office Building
Washington, DC 20515
202-226-0853

WASHINGTON, D.C. - As the 110^th Congress draws to a close, House Natural Resources Committee Chairman Nick J. Rahall (D-WV) highlighted the many landmark legislative victories for America's natural resources over the past two years, made possible by the Democratic Majority that has begun to move the Nation in a new direction.