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Conversation on Coverage

The Conversation on Coverage is an unprecedented public policy initiative that has brought together a range of experts with different perspectives to work together to find new approaches to increasing pension coverage for the millions of low- and moderate-income wage earners who currently have no pensions or retirement savings to supplement Social Security.

On May 11, 2007, the final recommendations of the Conversation on Coverage were released at a press conference and congressional briefing in a report, Covering the Uncovered: Final Report of the Conversation on Coverage. 

Below is a brief overview of the Conversation’s proposals:

  • Two new types of guaranteed pension plans, which recognize that employees need income they can count on in retirement:
    • The Guaranteed Account Plan (GAP) is new type of “hybrid” plan – one that takes some of the features of traditional pension plans and combines them with features of 401(k) plans.  Under GAP, employers contribute to employees’ pension accounts and guarantee a promised rate of return.  The funding rules for GAP are simple and will protect the employer from steep future funding increases.  

    • The Plain Old Pension Plan (POPP) is a new simplified traditional defined benefit pension plan that is easy for employers to create, fund, and administer.  The POPP has simpler and more predictable funding rules than other defined benefit plans, while still providing a lifetime stream of income for retirees.

  • A new plan that will encourage individuals to save for retirement:
    • The Retirement Investment Account (RIA) establishes a new national clearinghouse structure to administer portable individual retirement accounts.  This structure provides an easy and efficient way for workers who are not covered by plans to save for retirement.

  • A new plan that will expand coverage in the small business sector: The Model T is a new simplified, low-cost multiple employer payroll deduction plan which will be offered by sold and marketed by financial institutions to small employers where the coverage rates are the lowest. The Model T’s simplicity should lend itself to effective marketing techniques.

The Conversation on Coverage was launched at a two-day public policy forum convened by the Pension Rights Center in July of 2001.  Since that time, the Conversation has convened three Working Groups – composed of more than45 individuals from a broad spectrum of viewpoints – to develop pragmatic, common ground proposals aimed at both encouraging more companies to sponsor plans and expanding retirement savings for American workers.

The Conversation is supported by the Ford Foundation, the Annie E. Casey Foundation, and The Atlantic Philanthropies, and by Platinum Sponsors: AARP, MetLife and Nationwide; Sponsoring Organizations: ASPPA Pension Education and Research Foundation the Employee Benefit Research Institute, Fidelity Investments, the International Association of Machinists and Aerospace Workers, the National Committee to Preserve Social Security and Medicare, Prudential Financial, the Retirement Security Project, the U.S. Chamber of Commerce, and Vanguard; and Co-Sponsoring Organizations:  the AFL-CIO, the American Academy of Actuaries, the American Benefits Institute, the American Council of Life Insurers, the Communications Workers of America, and the Service Employees International Union.

The web site for the Conversation on Coverage is www.conversationoncoverage.org.