WASHINGTON — The chairman of a House panel today called for stronger measures to protect private pension fund assets so workers do not lose their retirement savings to fraud and mismanagement.
"We must develop greater safeguards to adequately protect the nation's private pension fund assets," Rep. William J. Hughes (D-N.J.) said as he opened a hearing by the House subcommittee on retirement income and employment.
"Our workers and retirees have a right to expect that the pensions they have worked so hard to earn and which they are counting on to meet basic living expenses during their retirement years are not eroded away by waste, fraud and corruption," he said.
The hearing stemmed from reports issued by the Labor Department's inspector general office that pointed to the vulnerability of $2 trillion in assets of pension plans covering 76 million Americans.
The latest inspector general's report, obtained by the Associated Press, says billions of dollars in private pension money is not being fully audited because the money was invested in such institutions as savings and loans.
Some Labor Department officials dispute the extent of the problems, saying the department's acting inspector general, Raymond Maria, has exaggerated the potential for fraud. Maria has likened the potential to the recent savings and loan crisis, which some estimates say will require a $100-billion taxpayer bailout.
David George Ball, assistant labor secretary for pension and welfare benefits, told the hearing: "The pension system, by any objective measure, has never been healthier."
Maria, in his testimony, said, "Our goal is not to unnecessarily frighten people but to stimulate concern where such concern is needed and to avoid potential future crisis."
He said inadequate regulations and reliance on civil rather than criminal remedies have "created a window of opportunity for those who would embezzle and steal from plan participants."