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Retirement Planning > Retirement Investing

Tom Harkin: Fix the Retirement System

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Harkin, D-Iowa, delivered that message today here at a conference organized by the National Institute on Retirement Security, Washington.

The list of speakers also included Dirk Kempthorne, the new president of the American Council of Life Insurance (ACLI), Washington.


Harkin, chairman of the Senate Health, Education, Labor and Pension Committee,Tom Harkin attracted insurance industry attention a year ago by helping sellers of indexed annuities keep the U.S. Securities and Exchange Commission from classifying the products as securities.

Today, Harkin said that Social Security must continue to be part of the retirement mix and told attendees that he is making retirement security a priority.

Core principles for improving the system include a need for shared responsibility and a need for retirement assets to be professionally managed, Harkin said.

“There’s a lot to be done, but retirement security is something I’m willing to fight for,” Harkin said. “I really do think we’re at a crossroads here. There are two paths in front of us: We can keep going like we have for years – making it harder and harder for families to get by – or we can stand up and say it’s time for a change, it’s time to fix what’s broken. I’m confident that we will make the right choice.”

Harkin called for scrapping the current emphasis on do-it-yourself asset management.

“Forcing people to manage their own retirement funds isn’t working,” Harkin said.

Few workers have the background needed, the interest or the time, he added.

“Instead, retirement dollars need to be pooled to take advantage of economies of scale and managed by professionals who carefully select and monitor every investment in a diversified portfolio,” Harkin said. “That would make it easier for workers, and it’s better for the economy as a whole.”

Harkin criticized efforts to attack Social Security.

Social Security has “proven to be the most successful domestic program in our nation’s history,” Harkin said. “As a member of the Defending Social Security Caucus, and a recipient of benefits when I was in my teens, I’m committed to keeping this program strong and solvent for the long-term….Part of that effort must be to counter the scare-tactics and misinformation of those who are once-again trying to dismantle the program.”


Kempthorne, who recently took over at the ACLI from Frank Keating, talked about the importance of annuities as one of the investment vehicles needed to help Americans achieve lifetime fDirk Kempthorneinancial and retirement security.

When the U.S. Labor and Treasury departments last year issued a request for information on ways to help retirees achieve lifetime income, “it suggested that, for the first time, Labor and Treasury recognized that private-sector annuities are part of the solution to the retirement income crisis,” Kempthorne said. “Not the only part, but an important part.”

Annuities build on the income guaranteed by Social Security, and lifetime annuities “and the value they represent offers peace of mind to retirees in the same way pensions do,” Kempthorne said.

“America is suffering from a financial education deficit disorder,”

Kempthorne warned. “Many workers, especially those approaching retirement, need to develop a better understanding of how to build savings, how to assess their retirement income needs and where to get expert advice.”

Kempthorne called for passage of the bipartisan Lifetime Income Disclosure Act, which has been introduced as S. 267 in the Senate and as H.R. 677 in the House. The bill would require employers to give retirement plan participants annual statements illustrating how their accumulated savings might translate into annual or monthly streams of guaranteed income at retirement.

“This would help workers visualize how well their retirement savings will address their month-to-month living needs,” Kempthorne said.

Other lifetime income coverage from National Underwriter Life & Health:


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