WASHINGTON – Today the Pension Rights Center applauded Senator Tom Harkin (D-Iowa), chairman of the Senate Health, Education, Labor, and Pensions Committee, for introducing the USA Retirement Funds Act into Congress. The Senator’s bill would create a new system of privately-run retirement funds.
“Senator Harkin’s creative and innovative USA Retirement Funds proposal will expand pension coverage for millions of workers,” said Karen Friedman, executive vice president and policy director for the Pension Rights Center. “USA Retirement Funds embrace many of the best features of traditional pension plans: they are pooled and professionally invested, they lock the money in until retirement, and they pay out a stream of monthly payments that cannot be outlived. Also, investment and life expectancy risks are shared by all participating workers and retirees, improving on 401(k) plans where the risks are borne by each individual. We applaud Senator Harkin for developing an exciting new concept to address the nation’s retirement income crisis.”
At the same time, Friedman noted that, “The bill could be strengthened by requiring employers to contribute to these funds. If the goal is to enable people to retire with adequate income, it is critical that both employers and employees contribute.”
Senator Harkin’s proposal comes two days after President Obama announced the creation of myRAs, a new retirement savings bond, in his State of the Union address.
“The myRA is an easy, government-backed retirement savings plan that can help low- and moderate-wage earners save without fees and with the same rate of interest earned by federal employees in the Thrift Savings Plan’s government securities fund,” said Friedman. “We hope that President Obama will also support a more comprehensive approach like the Harkin bill. With our country facing a $6.6 trillion Retirement Income Deficit, perhaps 2014 is the year that the nation will begin to address the retirement income crisis in earnest.”
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