Nick Thorton
Democrats on the Joint Economic Committee, which is comprised of members of the Senate and the House of Representatives, have issued a report detailing a bleakpicture of the country’s retirement landscape.
Retirement Security in Peril catalogues data from outside sources that will be familiar to industry stakeholders: Half of households near retirement have less than $12,000 in formal retirement savings; large employer sponsorship of defined benefit plans has plummeted over the decades; 30 percent of fulltime workers in the private sector don’t have access to a savings plan through their employers.
“Congress must now focus on policies that broaden access to low cost, high-yield retirement savings options, strengthen Social Security, secure pension plans, and restore access to a stable and adequate retirement for an aging population,” the report says.
The Joint Economic Committee is one of four permanent committees in Congress that share membership between the two chambers.
Created in 1946, it’s charged with advising Congress on all matters of economic policy. Each year the Chairman of the Federal Reserve reports to the Committee on the state of the economy and monetary policy. The Committee also issues and annual reports.
“Americans deserve to retire with dignity—yet too many families in this country are unable to save for a secure retirement,” said Sen. Martin Heinrich, D-NM, ranking member on the Joint Economic Committee, in a statement. “Congress must take action to make certain that older Americans do not face an impending retirement crisis.”
The report underscores the necessity for policy action, and says Congress’ first step should be to address Social Security’s funding shortfall.
“Policymakers have discussed raising the current payroll tax cap of $128,400 so that a larger share of wealthier Americans’ earnings would go into the Social Security trust fund and increasing the payroll tax rate marginally if real wage growth accelerates,” the report says.
In its 2017 Joint Economic Report, lawmakers on the Committee write: “There is bipartisan agreement that Social Security can be reformed relatively easily.
The report alleges that Republican proposals to reform Social Security would cut benefits.
“Suggested reforms to Social Security, many of which propose deep cuts to benefits and changes to existing requirements, would wreak havoc on family finances and could push many into poverty,” the report says.
The Retirement Security in Peril report also references legislative proposals that would expand sponsorship of retirement plans in the private sector, including new tax credits and open multiple employer plans for small employers.
And it specifically references the Preserve Rights of States and Political Subdivisions to Encourage Retirement Savings Act. That Democratic-sponsored bill would amend the Employee Retirement Income Security Act to allow states and cities to more readily sponsor retirement plans for private sector workers. The Obama-era Labor Department issued such a safe harbor, but Congress rolled it back in 2017 under the Congressional Review Act.
The PROSPERS Act “is a good step towards ensuring that Americans are able to retire with economic security,” Sen. Heinrich said.
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