All employers would be required to contribute to a retirement plan for their workers under a series of reform principles offered today by a group of worker advocacy and policy associations.
At a conference in Washington, the group, which includes the Pension Rights Center and the Service Employees International Union, rolled out its new Retirement USA initiative, which is intended to pave the way for the creation of a new retirement system that would provide workers without an employer-sponsored retirement plan enough income on top of their Social Security payments to maintain a reasonable standard of living in retirement, according to a statement the group released.
The federal government would subsidize the contributions of lower-income workers under the plan, with all contributions pooled and professionally managed to minimize costs and financial risks. A government regulator would oversee the plan.
Payouts would generally be limited to retirement, and employees would be able to make additional contributions to the accounts, with reasonable limits for tax-favored contributions, according to a statement by the group.
At the conference, representatives of the Pension Rights Center, SEIU, Economic Policy Institute and National Committee to Preserve Social Security and Medicare said the existing system leaves many Americans without adequate retirement savings and half of full-time private-sector workers lacking a retirement plan.
In his 2010 budget blueprint, President Barack Obama proposed enhancing retirement savings by requiring automatic enrollment for existing sponsors of 401(k) plans and to mandate that employers who arent providing a retirement program to automatically enroll their workers in a direct-deposit IRA account. The principles endorsed by Retirement USA reach far beyond that, in part by requiring employer contributions. They (President Obamas proposals) recognize the problem, said Karen Ferguson, PRC director, at the conference. They certainly dont solve it. Were hopeful that the president will come out with something bolder.
We will be asking members of Congress to take the principles into account as they consider any retirement income legislation, said Nancy Hwa, a PRC spokeswoman.