Comments to the White House Conference on Aging on its Retirement Security Policy Brief (July 7, 2015)
The following comments were submitted to the White House Conference on Aging on its Retirement Security Policy Brief, in advance of the Conference’s 2015 meeting on July 13.
According to the Center for Retirement Research at Boston College, the nation is facing a $7.7 trillion Retirement Income Deficit, which is the gap between what people have saved as of today and what they should have already have saved to meet a basic standard of living.
For that reason, the Pension Rights Center applauds the White House Conference on Aging for making retirement security one of its top issues of concern. The Center generally endorses the recommendations in the Retirement Security brief, including protecting and strengthening Social Security and expanding employer-based retirement savings options by increasing state-based retirement savings initiatives, improving options for part-time workers, and promoting lifetime income options in 401(k)s through deferred annuities. The Center has also been a strong advocate for a revised Labor Department rule to stop financial advisors from giving conflicted investment advice to workers and retirees about their 401(k) and IRA money.
The Center has further recommendations that complement the theme of the report that “all Americans deserve to retire with dignity.” Here are our additional recommendations:
I. To ensure that people are able to retire with adequate and secure income, we urge the White House Conference on Aging to support:
- Expanding Social Security: Social Security is the cornerstone of American retirement security. The program is doing an unparalleled job of providing a critical foundation of retirement income to virtually all retirees. We strongly urge the White House Conference on Aging to recognize the need to increase Social Security for all working families as well as to increase the minimum benefits for those at the lower end of the wage scale.
- Developing new types of plans for uncovered workers that combine the best features of guaranteed defined benefit plans and 401(k) plans. While Social Security provides a critical foundation of income, individuals need pensions and other retirement savings to supplement Social Security. While a proposed system of automatic IRAs would provide modest savings to those who don’t currently participate in a workplace plan, to truly have adequate income, workers need to participate in pension plans in which employers and employees contribute, in which the money is pooled and professionally invested, and from which individuals get lifetime income. We encourage the Conference to support the development of new types of comprehensive plans, such as the USA Retirement Funds proposed by former Senator Tom Harkin, which is an arrangement of independently-trusteed retirement funds that efficiently allocates risk while providing adequate lifetime benefits for workers and retirees.
II. To ensure that promises to retirees now in the pension system are protected, we urge the White House Conference on Aging to:
- Support the Keep Our Pension Promises Act of 2015, which will reverse ill-conceived legislation passed at the end of 2014 that allows trustees of certain financially troubled multiemployer plans to reduce retirees’ benefits. The Keep Our Pension Promises Act will bring new money into multiemployer plans, protect the PBGC, and preserve retirees’ promised benefits. We should not balance the finances of multiemployer plans on the backs of its most vulnerable participants.
- Call for retiree protections when companies seek to shift retirement risks to pensioners by offering them lump-sum buyouts or life insurance annuities. Companies should not be allowed to offer lump sums to retirees who are already in pay status. Also, there is a need for improved disclosures and consumer protections in these transactions.
- Work to stop religiously-affiliated nonprofits from denying retirees private pension insurance protection by claiming “church plan” status.
III. To protect workers’ retirement rights, we urge the Administration to:
- Expand the U.S. Administration on Aging’s Pension Counseling and Information Program. This program provides hands-on individualized assistance in 30 states to people with pension and other retirement income problems. Since its founding in 1993, the program has recovered more than $200 million in retirement benefits for retirees and their families, and helped tens of thousands of low- and moderate-income individuals with difficult retirement questions and problems. This is a government-supported program that works, and it should be expanded so that it is able to provide assistance in all 50 states.
- Encourage the Pension Benefit Guaranty Corporation to establish a Lost Pension Plan Clearinghouse so that retirees can locate their retirement plans when their former companies have moved, merged, or changed their names.