Pension News

Thirty-six years ago today the nation’s landmark private pension law, the Employee Retirement Income Security Act of 1974 (ERISA), was signed into law by President Gerald Ford. In honor of the workers who would benefit from the new law, the signing appropriately took place on Labor Day.

ERISA made private retirement plans fairer and helped ensure that workers received the pensions their employers had promised to give them at retirement. ERISA also created the Pension Benefit Guaranty Corporation – the federal pension insurance program. As a result of ERISA, most traditional pension plans are insured, adding an important layer of protection for workers and retirees should their companies go out of business.

Traditional pensions are just as important today as they were when ERISA was passed, because they provide retirees with financial security through the ups and downs of unpredictable economic times. There are, however, still many gaps in ERISA that need to be fixed, and more workers that need to be covered.

While much of the recent focus is on expanding coverage through individual retirement accounts (IRAs) and 401(k)s, we must not forget about ERISA’s initial goals of providing secure retirement benefits to all workers of all economic backgrounds – from the executive to the teacher to the janitor.

Increasing access to IRAs and 401(k) saving vehicles is a good thing, but these saving vehicles are not the complete solution. So far, they have not shown that they can provide sufficient or secure retirement income for most people. Also, the trend towards more individualized saving vehicles has led to new problems for participants that now need to be addressed by the law – participants need more information about the fees they pay for and participants need access to independent investment advice.

Happy Birthday, ERISA. You’ve come along way and helped millions of workers attain secure retirement incomes. But after celebrating where you came from and what you have accomplished in the past, it is time for you to move forward and meet the future challenge of providing safe and sufficient retirement incomes to all working Americans.

Thinking about tapping into your 401(k) early? Think again - at least if you want a shot at a secure retirement. Read the rest of this entry »

Our birthday present to you is that we are going to stop policymakers from chopping you to pieces.

Social Security, you’ve been providing an economic lifeline that millions of Americans rely on. It’s too bad that on your 75^th birthday, you’re under siege like never before.

What a bunch of ingrates, right? You’ve become so wildly successful that policymakers have started to take you for granted. Even though you help every American family - young and old - you’re terribly misunderstood.

Among the misunderstandings is that you’re “broken” and must be reformed.

That’s a laugh. You’ve been around for 75 years, you’ve never missed a payment, and you’re able to pay full benefits for another quarter of a century - and that’s without making a single change to the way you work.

Who else can make such a claim?

I’ll tell you who?  Nobody and no program.

Here’s what you should tell Americans: Without you, there would be terrible poverty among the elderly in this country. Not to mention the scores of children and people with disabilities who would be in dire straits, too. Take a look at the facts:

 –And Social Security also has lifted 6.5 million children under age 18, or nearly 9 percent of all U.S. children out of poverty.

–Without Social Security 8.1 million women age 65 and older would be living in poverty.

–Almost 7 out of 10 older Americans depend on Social Security for more than half their income and one out of 4 receive ALL their income from Social Security. 

–If not for Social Security, almost 13 million additional older Americans would be living in poverty.  

So, on your 75^th birthday we should be hailing you, Social Security, as THE great American success story - not attacking you.

This is why Retirement USA - a coalition of consumer interest groups, unions, and advocates for retirees - has as one of its core principles the insistence that Social Security benefits not be touched. Retirement USA is advocating for a new retirement system for future generations of Americans (in addition to Social Security) that is Universal, Secure, and Adequate.

Retirement USA is sponsoring “Wake Up, Washington!” month, a national speak-out about retirement security that will take place from September 15-October 15. This month will be a time for Americans across the country to tell lawmakers to keep their hands off of Social Security and to fix our broken, patchwork private retirement system.

So, Social Security, I hope a lot of your fans will help us celebrate your 75^th  birthday by making their voices heard in the Retirement USA story bank!

Certain rules in the Internal Revenue Code are designed to prevent employers from discriminating against non-highly paid employees in their pension plans. Unfortunately for the retirement security of their employees, some employers look for ways to get around the nondiscrimination rules. Read the rest of this entry »

Have you heard that the government is planning to seize your 401(k) and use the money to send monkeys to Mars? Well, we haven’t heard about the monkey part, but some people are making the claim that the government is gunning for workers’ 401(k)s. Read the rest of this entry »

Over the last few months you’ve probably heard reports about the president’s fiscal commission. Word around town is that this secretive commission, with its stated goal of reducing the federal deficit, is seriously considering cuts to Social Security. Read the rest of this entry »

Dow Jones Newswires reports that the Internal Revenue Service has released rules clarifying when participants in 401(k) plans can sell company stock held in their accounts.  Read the rest of this entry »

May is Older Americans Month. The U.S. Administration on Aging has announced that this year’s theme for the month is “Age Strong! Live Long!” which “recognizes the diversity and vitality of today’s older Americans who span three generations.” Read the rest of this entry »

Yesterday I joined friends from Social Security Works, OWL - The Voice of Midlife and Older Women, Social Security Matters, the Alliance for Retired Americans, the Economic Policy Institute, and others outside of the Ronald Reagan Building and International Trade Center as Pete Peterson (you know him, he’s the one who is trying to scare everyone into thinking that Social Security is on its last legs - don’t worry, it isn’t) hosted a closed-door meeting of millionaires and billionaires, at which cutting Social Security was a primary point of discussion.  Read the rest of this entry »

Here’s some of the latest news from the world of pensions: Read the rest of this entry »