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INTERPUBLIC-SPONSORED RESEARCH: CONSUMERS WOULD 'JUMP-START' ECONOMY IF THEY COULD BORROW FROM RETIREMENT PLANS

 INTERPUBLIC-SPONSORED RESEARCH: CONSUMERS WOULD 'JUMP-START' ECONOMY
 IF THEY COULD BORROW FROM RETIREMENT PLANS
 NEW YORK, March 6 /PRNewswire/ -- The Interpublic Group of Companies, Inc. (NYSE: IPG), the largest American-owned advertising agency group, has concluded from market research it has sponsored that consumers would be willing to pump more money into the economy if they could borrow more freely from their own IRA and 401K retirement plans.
 Interpublic specifically sponsored this research to determine whether consumers would respond to incentives being considered in Washington.
 Philip H. Geier Jr., chairman and chief executive officer of Interpublic, has cited the market research both in a letter he has sent to members of Congressional committees and in a full-page ad he is running today (March 6) in USA Today. Specifically, he is asking Congress to support a suggested amended Specter/Domenici Senate Bill S-1984, which would carry these consumer borrowing provisions.
 According to the research, many more Americans would be more willing to buy cars and homes or make home improvements if they could borrow from their IRA and 401K retirement plans and still retain their tax benefits by returning the money within the next five years. Geier termed his plan "Americans using their own money to invest in themselves and the nation."
 "My company's business is understanding consumers," Geier said in his letter to members of the House Ways & Means Committee and the Senate Finance Committee. "That is why, after reading the bill in the Nov. 19, 1991, Congressional Record, my question was what would consumers do in these times when presented with its provisions. Consequently, we put a version of S-1984 into independent national consumer research to find some answers."
 The research specifically asked Americans whether they would act upon the suggested amended bill's provisions allowing them to use up to $10,000 of their own money currently in their IRAs to purchase a new home, improve their current home, or buy a car or truck, if there could be no penalty or tax consequence attached to borrowing from these retirement funds. An overwhelming number of the respondents answered "yes." Moreover, the people who responded positively to the consumer survey were saying that they would be willing to enter the market and spend within the next six months.
 The projectable survey showed that 38 percent more people than are now in the market to buy a car said they would be interested in purchasing a vehicle if they could use their own funds without penalty. That response represents an additional 4.8 million consumers spending approximately $65 billion more on automobile purchases. That figure is out of a projected total of over $200 billion in purchasing power that the amended bill could unleash (not including the additional mortgage money generated). And the plan would not cost taxpayers a penny.
 The low level of consumer confidence has frequently been cited as a factor contributing to a continuing recession. Geier noted in his letter that while interest rates on loans and mortgages are attractively low, banks and lending institutions do not possess their traditional strength and so require consumers to put more money into their down payment to qualify. This, he said, effectively creates a gap which keeps the low interest rates out of reach for too many Americans. He believes that a suggested amended S-1984 is a way to close the gap for many would-be home buyers and automotive consumers.
 Geier sees only positive effects resulting from the suggested bill. With consumer investment in the housing and automotive markets he sees current employment being secured, new jobs being created and good reason to expect consumer confidence to rise. He believes strongly that this opportunity should not be missed to give Americans the chance to invest their own money in themselves and the nation.
 The Interpublic Group of Companies is comprised of McCann-Erickson Worldwide, Lintas:Worldwide, Dailey & Associates, The Lowe Group and other related companies.
 -0- 3/6/92
 /CONTACT: Philip H. Geier, 212-399-8028, or Ronald Sugarman, 212-399-8111, both of the Interpublic Group of Companies/
 (IPG) CO: Interpublic Group of Companies Inc. ST: New York IN: ADV SU:


CK-AH -- NY035 -- 5896 03/06/92 13:22 EST
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Date:Mar 6, 1992
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