President Jimmy Carter will go down in history as the nation’s 39th president and a Nobel Peace Prize winner, but his legacy also includes something else: concern for U.S. workers’ retirement security.
Carter, who died at age 100 on Dec. 29, signed an executive order dated July 12, 1978, establishing the President’s Commission on Pension Policy.
The order tasked the commission with developing policies to ensure the U.S. had “effective and equitable retirement, survivor and disability programs which take into account available resources and demographic changes that are expected into the middle of the next century.”
The commission's idea regarding universal coverage has inspired present-day legislation known as the Retirement Savings for Americans Act, according to Teresa Ghilarducci, a labor economist and nationally recognized retirement security expert.
While Carter's order, later amended by a subsequent one, was signed decades ago, a recent mention of the commission drew an excited response from Ghilarducci.
“Wrote my dissertation on that commission and used the data!!,” Ghilarducci, who holds the Irene and Bernard L. Schwartz Chair in economic policy analysis in the economics department at the New School for Social Research, said in a Dec. 30 email. “Retirement security would be so much better if MUPS had passed.”
The commission recommended that a “Minimum Universal Pension System (MUPS)” be set up for all workers, according to an executive summary of the commission’s final report, which was reproduced in a May 1981 Social Security Bulletin.
Had MUPs been implemented, would the American retirement landscape would be different, according to Ghilarducci, who has authored several books on retirement security, including "Rescuing Retirement: A Plan to Guarantee Retirement Security for All Americans," which she wrote with former Blackstone Executive Vice Chairman Tony James.
“Everyone would have a financial retirement account supplementing Social Security,” Ghilarducci said, adding that currently 83 million Americans are unable to save for retirement via workplace retirement plans because their employers won’t sponsor such plans.
“And almost half of Americans won’t be able to maintain their living standards in old age,” she said. “MUPS would have substantially improved retirement prospects.”
Carter's idea inspired solutions today
While the commission’s recommendation regarding MUPS wasn’t implemented, there is still reason for optimism, according to Ghilarducci.
“A version of MUPS is now in Congress based on that idea,” she said in the December email, citing the RSAA.
The RSAA was inspired by a March 2021 paper authored by Ghilarducci and economist Kevin Hassett, she said. President-elect Donald J. Trump announced in November that Hassett will serve as director of the White House National Economic Council.
“As my chair of the Council of Economic Advisers, Kevin played a crucial role in helping to design and pass the Tax Cuts and Jobs Act of 2017,” Trump said in a Nov. 26 statement.
The RSAA is expected to be reintroduced in the current Congress. The 119th Congress convened on Jan. 3.
“The bipartisan and bicameral Retirement Savings for Americans Act (RSAA), introduced in the House by Reps. Smucker (R-PA-11) and Sewell (D-AL-7) and in the Senate by Sens. Hickenlooper (D-CO) and Tillis (R-NC), continues to gain strong support,” an Oct. 26, 2023 news release from Rep. Lloyd Smucker’s office said.
The release included a link to an Oct. 24, 2023 letter from business leader Charles Schwab expressing his support for RSAA. In a January 2024 letter to Rep. Smucker and Rep. Terri Sewell, AARP also expressed support for RSAA.
However, not everyone thinks RSAA is a good idea.
In their Nov. 7, 2024 article titled “Will the Retirement Savings for Americans Act Save Retirement?” Spencer Look, associate director, and Jack VanDerhei, director of retirement studies, for The Morningstar Center for Retirement & Policy Studies, noted that many Americans don’t have access to a retirement plan via their employer.
The RSAA would create a federal retirement plan, automatically enrolling workers lacking access to an employer-sponsored plan at a 3% savings rate, the article said. It would also provide a federal match tax credit for low- and moderate-income workers, which would start to phase out at median income, the article said.
“While the proposal may sound promising, our research shows that most Americans would be better off under the current system,” the article said. “Why? In short, the RSAA would likely change both investor savings behavior and retirement plan sponsor behavior, resulting in lower net savings rates.”
