Private retirement plans are not working. So says four organizations that launched Retirement USA, an initiative aimed at rebuilding America’s retirement system, yesterday.
“America’s promise of a secure retirement is central to our nation’s ideals,” says Karen Ferguson, director of the Pension Rights Center, one of the organizations involved in the new initiative. “But for too many Americans, that promise is unfulfilled. While we need to maintain and improve the pension and retirement savings plans that we have today, we need to do more. We need a new system for the future.”
In addition to the Pension Rights Center, Retirement USA is supported by the Economic Policy Institute, the National Committee to Preserve Social Security and Medicare, and the Service Employees International Union (SEIU).
The groups presented a set of principles yesterday that dictate what an ideal retirement system embodies. Paramount are universal coverage, and secure and adequate income for retirement.
Retirement USA’s call for universal coverage parallels President Obama’s similar proposal for a universal, automatic enrollment IRA system. Essentially, every single worker, unless otherwise enrolled in an adequate savings plan, should be granted the opportunity to participate in a uniform savings plan. Similarly, the group hails the idea of requiring every employer and employee to contribute a specified amount of pay to a retirement savings plan. Although Obama’s plan provides for an opt-out of automatic enrollment.
Retirement USA also places accountability solely on government oversight, calling for a single government regulator dedicated to promoting retirement security.
“The current private retirement system is failing most Americans. More than half have no employer-provided retirement plan, and most of those who do are woefully unprepared as they near retirement. 401(k)s can’t do the job,” says Ross Eisenbrey, vice president of the Economic Policy Institute.