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S 2982 IS

To establish a grant program to enhance the financial and retirement literacy of mid-life and older Americans and to reduce financial abuse and fraud among such Americans, and for other purposes.

September 19, 2002

Mr. CORZINE (for himself, Mr. FITZGERALD, Mr. SARBANES, and Mr. AKAKA) introduced the following bill; which was read twice and referred to the Committee on Health, Education, Labor, and Pensions

To establish a grant program to enhance the financial and retirement literacy of mid-life and older Americans and to reduce financial abuse and fraud among such Americans, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the `Education for Retirement Security Act of 2002'.

SEC. 2. FINDINGS.

Congress finds the following:

(1) Improving financial literacy is a critical and complex task for Americans of all ages.

(2) Low levels of savings and high levels of personal and real estate debt are serious problems for many households nearing retirement.

(3) Only 53 percent of working Americans have any form of pension coverage. Three out of four women aged 65 or over receive no income from employer-provided pensions.

(4) The more limited timeframe that mid-life and older individuals and families have to assess the realities of their individual circumstances, to recover from counter-productive choices and decisionmaking processes, and to benefit from more informed financial practices, has immediate impact and near term consequences for Americans nearing or of retirement age.

(5) Research indicates that there are now 4 basic sources of retirement income security. Those sources are social security benefits, pensions and savings, healthcare insurance coverage, and, for an increasing number of older individuals, necessary earnings from working during one's `retirement' years.

(6) The $5,000,000,000,000 loss in stock market equity values since 2000 has had a significantly negative effect on mid-life and older individuals and on their pension plans and retirement accounts, affecting both individuals with plans to retire and those who are already in retirement.

(7) Although today's older individuals are generally thought to be doing well, nearly 1/5 (18 percent) of such individuals were living below 125 percent of the poverty line during a year of national prosperity, 1995.

(8) Over the next 30 years, the number of older individuals in the United States is expected to double, from 35,000,000 to nearly 75,000,000, and long-term care costs are expected to skyrocket.

(9) Financial exploitation is the largest single category of abuse against older individuals and this population comprises more than 1/2 of all telemarketing victims in the United States.

(10) The Federal Trade Commission (FTC) Identity Theft Data Clearinghouse has reported that incidents of identity theft targeting individuals over the age of 60 increased from 1,821 victims in 2000 to 5,802 victims in 2001, a threefold increase.

SEC. 3. GRANT PROGRAM TO ENHANCE FINANCIAL AND RETIREMENT LITERACY AND REDUCE FINANCIAL ABUSE AND FRAUD AMONG MID-LIFE AND OLDER AMERICANS.

(a) AUTHORITY- The Secretary is authorized to award grants to eligible entities to provide financial education programs to mid-life and older individuals who reside in local communities in order to--

(1) enhance financial and retirement knowledge among such individuals; and

(2) reduce financial abuse and fraud, including telemarketing, mortgage, and pension fraud, among such individuals.

(b) ELIGIBLE ENTITIES- An entity is eligible to receive a grant under this section if such entity is--

(1) a State agency or area agency on aging; or

(2) a nonprofit organization with a proven record of providing--

(A) services to mid-life and older individuals;

(B) consumer awareness programs; or

(C) supportive services to low-income families.

(c) APPLICATION- An eligible entity desiring a grant under this section shall submit an application to the Secretary in such form and containing such information as the Secretary may require, including a plan for continuing the programs provided with grant funds under this section after the grant expires.

(d) LIMITATION ON ADMINISTRATIVE COSTS- A recipient of a grant under this section may not use more than 4 percent of the total amount of the grant in each fiscal year for the administrative costs of carrying out the programs provided with grant funds under this section.

(e) EVALUATION AND REPORT-

(1) ESTABLISHMENT OF PERFORMANCE MEASURES- The Secretary shall develop measures to evaluate the programs provided with grant funds under this section.

(2) EVALUATION ACCORDING TO PERFORMANCE MEASURES- Applying the performance measures developed under paragraph (1), the Secretary shall evaluate the programs provided with grant funds under this section in order to--

(A) judge the performance and effectiveness of such programs;

(B) identify which programs represent the best practices of entities developing such programs for mid-life and older individuals; and

(C) identify which programs may be replicated.

(3) ANNUAL REPORTS- For each fiscal year in which a grant is awarded under this section, the Secretary shall submit a report to Congress containing a description of the status of the grant program under this section, a description of the programs provided with grant funds under this section, and the results of the evaluation of such programs under paragraph (2).

SEC. 4. NATIONAL TRAINING AND TECHNICAL ASSISTANCE PROGRAM.

(a) AUTHORITY- The Secretary is authorized to award a grant to 1 or more eligible entities to--

(1) create and make available instructional materials and information that promote financial education; and

(2) provide training and other related assistance regarding the establishment of financial education programs to eligible entities awarded a grant under section 3.

(b) ELIGIBLE ENTITIES- An entity is eligible to receive a grant under this section if such entity is a national nonprofit organization with substantial experience in the field of financial education.

(c) APPLICATION- An eligible entity desiring a grant under this section shall submit an application to the Secretary in such form and containing such information as the Secretary may require.

(d) BASIS AND TERM- The Secretary shall award a grant under this section on a competitive, merit basis for a term of 5 years.

SEC. 5. DEFINITIONS.

In this Act:

(1) FINANCIAL EDUCATION- The term `financial education' means education that promotes an understanding of consumer, economic, and personal finance concepts, including saving for retirement, long-term care, and estate planning and education on predatory lending and financial abuse schemes.

(2) MID-LIFE INDIVIDUAL- The term `mid-life individual' means an individual aged 45 to 64 years.

(3) OLDER INDIVIDUAL- The term `older individual' means an individual aged 65 or older.

(4) SECRETARY- The term `Secretary' means the Secretary of Health and Human Services.

SEC. 6. AUTHORIZATION OF APPROPRIATIONS.

(a) AUTHORIZATION- There are authorized to be appropriated to carry out this Act, $100,000,000 for each of the fiscal years 2003 through 2007.

(b) LIMITATION ON FUNDS FOR EVALUATION AND REPORT- The Secretary may not use more than $200,000 of the amounts appropriated under subsection (a) for each fiscal year to carry out section 3(e).

(c) LIMITATION ON FUNDS FOR TRAINING AND TECHNICAL ASSISTANCE- The Secretary may not use less than 5 percent or more than 10 percent of amounts appropriated under subsection (a) for each fiscal year to carry out section 4.

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