Retirement Security

SOCIAL SECURITY PROTECTION

In the early 30's, as fortunes fell and the “Bonus Army” of poor, starving veterans marched on Washington, President Franklin Delano Roosevelt created a plan. It would ensure that no American would ever again be forced into a flophouse, begging for food from a society that seemed to use up workers and dispose of them. Roosevelt knew that many companies offered pensions, but more did not, and he felt the company owed a debt to those who labored for years to build America's infrastructure and economy.

This was the promise of Old Age, Survivors and Disability Insurance (OASDI), also known as Social Security, and of Medicare, when they were proposed and eventually passed, under the leadership of Presidents Roosevelt and Johnson. The government promised a safety net to prevent the misery of the elderly in previous years from ever occurring again.

Our grandmothers and grandfathers, who paid taxes to send their children and grandchildren to school, would be spared the indignity of flophouses and dog food dinners, by the taxes paid by those same children and grandchildren. A transfer of responsibility and appreciation had taken place.

At its apex, the Bush Administration planned to privatize OASDI, punching a hole in the safety net as it moved to private industry, the same private industry that produced Enron, "accounting irregularities," myriad businesses declaring insolvency and a constant stream of pension defaults and employee 401(k) plans becoming bankrupt.

Private industry has shown many great abilities throughout the history of this country, but in recent years, it has shown a devastating ability to leave retirees twisting in the wind, awaiting promised funds, pensions and health care that never arrives.

This “privatization” is designed to boost the holdings of brokerage houses, who would reap the funds currently held back for Social Security. It will also help big business, which would no longer be forced to match contributions by it's employees, as is now the case. The buck must stop somewhere, however. In this case, the buck stops far away from retirement security for our workers.

Rather than a guaranteed safety net, workers would put hard-earned money into a savings account, which would return far less after retirement, or a mutual fund-type account, which would be subject to the whims of the stock market.

The Social Security “trust fund” is solvent for decades to come. The concept of an “emergency” was a hoax, designed to instill fear in retirees. The trust fund must be protected from Congress and the Senate being allowed to dip into that fund, to pay off other debts.

Once that protection is in place, future shortfalls in Social Security funds can be easily overcome with fine tuning, not a complete dismantling of the one of the most effective government programs ever. We must protect the safety net created by President Roosevelt, ensuring that as our nation continues to progress, we do not allow that nation's past to fall through the cracks.

DEFINED BENEFIT PENSIONS

Along with the protection of Social Security, we must stop the abuse of Defined Benefit Pensions (DBP) by American corporations and the U.S. Government. Thousands of DBP's, were promised to workers in a different era, when companies offered a full pension package, with no employee contribution. Unfortunately, these companies are declaring bankruptcy at a devastating rate.

When companies undergo “reorganization”, the Pension Benefit Guarantee Corporation, a federal agency providing insurance for pensions, assumes liability for these pensions. Not covered by this insurance are any other benefits, like health insurance. Thousands of retirees are finding that the life they were promised after decades of hard work is no longer available to them.

Along with bankruptcy, the rising cost of health care is taxing the benefit level provided to retirees. General Motors and UAW just finished renegotiations for benefits to former GM employees. Because of health care costs being paid by GM for it's retirees, each General Motors vehicle on the road has a $1,500 surcharge. Before it is even built, $1,500 of the sale of each GM car, truck or van, goes directly to health care costs for GM retirees.

We must find a way, to ensure that promises made to the builders of our past are honored by the companies of the present, for which they worked so diligently, while still allowing the companies to compete in the future.

DEFINED CONTRIBUTION PLANS

Defined Contribution Plans, often referred to as 401(k)'s, must also be overhauled, to ensure that the contributions our workforce is making today, will fulfill the promise of a good life in the future.

Unlike Direct Benefit Pensions, 401(k)'s are not insured by anyone, including the federal government. As a result, companies like Enron and others have been able to plunder their employees' 401(k) funds through corporate malfeasance or bankruptcy, leaving a workforce unable to plan for their retirement.

We must create a system whereby those who work and attempt to save, in good faith, for their futures, are rewarded with the easy transition to retirement that they expect. No investment that is dependant on the stock market can be absolutely guaranteed, but there must be a more cohesive way to mitigate the amount of risk taken by employees.

Our government, businesses and banking industry must also increase the benefits Americans gain by simply saving money, outside of employer-sponsored plans. Currently, we have a national savings rate of 0 percent. Americans, on average, spend more than they make, each year. This must change. Our economy and our savings must to continue to grow, so our citizens can live with rewards of a lifetime of efforts, when they have retired from chasing the American Dream.