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Lawmakers Hear Proposals to Improve Retirement Security

Toomey says “government policy should protect all three pillars of retirement security...and preserve what works.”

by
Rodrigo Sermeño

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January 3, 2014 - 11:08 pm
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WASHINGTON – Experts told a Senate panel Congress should expand Social Security for the poor and encourage middle- and upper-income individuals to ramp up private savings to improve their retirement prospects.

Sens. Sherrod Brown (D-Ohio) and Patrick Toomey (R-Pa.) recently held the first of a series of hearings focused on how to enhance retirement security for Americans.

From 1979 to 2011, the number of private workers with retirement plans covered by defined benefit pension plans fell from 62 percent to 7 percent. At the same time, the percentage participating in defined contribution plans increased from 16 percent to 66 percent. This shift to defined contribution plans as the primary retirement vehicle has transferred the responsibility and risk for capital accumulation for retirement from employers to employees.

“At a time when we’re told that we are in charge of our retirement futures, only one quarter of American workers have automatic access to a defined contribution plan,” Brown said.

Both Republicans and Democrats on the panel acknowledged Social Security’s role in keeping millions of Americans out of poverty. They agreed that Social Security needs to remain in place to protect the elderly, the disabled, extended families, and children in the United States.

“Maintaining or expanding Social Security is the single most effective thing we can do to prevent poverty and economic ruin for millions of senior citizens, while promoting economic mobility for their children and grandchildren,” Brown said.

Around thirty-million Americans between the ages of 50 and 64, one half of those nearing retirement, have no retirement savings at all, according to research by the Schwartz Center for Economic Policy Analysis at the New School.

Brown said that many middle-class and low-income seniors rely on Social Security for a majority of their retirement income.

“The vast majority of economic gains in the last 25-30 years have gone to those at the very top of the income distribution in this country, obviously affecting savings and retirement,” Brown said.

He said the picture is bleaker for minorities. The median wealth of white households is 20 times that of black households, 18 times that of Hispanic households, the highest ratio since the government began publishing this data a quarter century ago.

Retirement security in the U.S. has traditionally been thought of as a “three-legged stool” consisting of Social Security, employer-provided pensions, and personal savings and investments.

Toomey said that “government policy should protect all three pillars of retirement security, recognize the strengths of the retirement system and preserve what works.”

The Pennsylvania Republican praised the various savings options available now and criticized attempts to reduce the amount Americans can save in tax-deferred accounts, such as the Obama administration’s proposal to place a $3 million cap on money accumulated in retirement accounts.

Robert Romasco, president of the AARP, said that Social Security is the only “dependable” leg, noting that traditional pensions have gone away, retirement income has shrunk, healthcare costs are increasing and 50 percent of the workforce have no employer-provided retirement plan.

He said his organization has done a study on the impact of Social Security benefits on the economy. It found that for each dollar to beneficiaries, there was $2 in spending, adding $1.4 trillion to economic output in 2012.

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Top Rated Comments   
Brown & Toomey, Hell NO!!! Everything government touches goes to hell. Probably explains why they're so good at war. I'd rather have Chinese thieves from Macau overseeing my pension than the Feds. Every social welfare program the Fed has ever embarked on was built on lies and deceit by politicians to create yet another unsustainable Ponzi scheme that employs tens of thousands more Federal employees who contribute nothing to the economy, could care less about their new "wards of the state" as long as they get their 5-6 figure government cheese at taxpayer expense. The only people who get screwed are the taxpayers who are coerced into going along with this crap. Everybody should write and call Brown and Toomey and their own Federal politicians and tell them keep their hands off pensions or doing anything else to help the plight of us poor, stupid folk whom they claim to be helping.
29 weeks ago
29 weeks ago Link To Comment
All Comments   (12)
All Comments   (12)
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Kabuki theatre 101!
Well, Washington DC elite are in session and the debt ceiling is fast approaching decision-making time…what will Congress do?
Here is how America’s $16.7 trillion dollar debt is composed of:
Intra-governmental holdings: for a rough total of (July 2013) $4.8 trillion, and
Debt held by the public: roughly about $11.9 trillion.
1)Intra-governmental holdings are:Treasury securities held by other federal agencies, a. Social Security Trust Fund (holds about $2.7 trillion), b.Office of Personnel Management (manages various federal retirement and pension funds, holding about $1.12 trillion), and c. Department of Health and Human Services (manages the supplementary medical insurance trust fund, holding about $69 billion). All told, US Federal Agencies hold about 29 % of U.S. debt.
2) Debt held by the “public:”
This includes everybody: a.From the U.S. Federal Reserve (with $1.66 trillion) b.Private pension funds ($605.2 billion), and c. foreign governments and investors (roughly 5.6 trillion dollars in Treasury Securities).This is about 47 %of the total “PUBLIC” debt!!!!!
Foreign Governments, broken down:
1) Mainland China
Mainland China held $1.277 trillion in Treasury securities in July. Hong Kong and Taiwan, also are major holders of U.S. debt.
2) Japan
Japan held $1.135 trillion in U.S. Treasury securities in July — a substantial increase from its June holdings, but not too much above its 2012 holdings.
4) Oil Exporters
This group of U.S. debt holders includes Ecuador, Venezuela, Indonesia, Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, the United Arab Emirates, Algeria, Gabon, Libya, and Nigeria, which together held $257.7 billion in Treasury securities in July. (please note, Absent, Brazil oil exports). Latin America and Middle Eastern countries are highly unstable.
5) Brazil
Brazil is the fifth-largest foreign holder of U.S. debt with $256.4 billion in hand as of July 2013. With upcoming FIFA soccer hosting and Olympics, Brazil’s economy could default…because it’s economy is already shrinking and foreign investors have been repatriating their foreign investments.
Will congress increase the debt ceiling to US$20 trillion or to US$21 trillion dollars??? With Yellen's confirmation, katy-bar-the-door! Pray. Amen. Join a Tea Party, urgently.
29 weeks ago
29 weeks ago Link To Comment
starting a file on private pensions, as part of the people's educational blog, if you have any additional data, or articles ... thanks in advance
@Forums4Justice on Twiiter

KNOWLEDGE IS POWER
29 weeks ago
29 weeks ago Link To Comment
So we're going to increase the current and future debt of a program that is currently in the red, whose "lockbox" consist of nothing more than I.O.U.s a la Dumb and Dumber. And people think this is a good idea.

Seriously, it's time to head for the hills and wait for the collapse. It was coming anyway and crap like this merely hastens the day.
29 weeks ago
29 weeks ago Link To Comment
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29 weeks ago
29 weeks ago Link To Comment
If they will simply refund all my SS deductions that they have taken over the years, I will call it even.
29 weeks ago
29 weeks ago Link To Comment
The problem with 401(k) plans, is that some employers don't give their employees any investment options other than company stock. Other companies provide an employer match, but only in company stock. Which means that if the company goes bankrupt, the workers lose their retirement nest eggs.

That's how the workers at Enron got shafted. Their 401(k) plans were mostly or entirely invested in Enron stock. When Enron went bankrupt, so did they.

The law should be changed to require that all 401(k) plans must give workers the option of investing any or all of their funds in things other than company stock, if they choose.
29 weeks ago
29 weeks ago Link To Comment
The US government has already made investment impossible.
When the financial collapse occurs, it will confiscate whatever
wealth remains in private hands by requiring it be exchanged
for government issued bonds.
29 weeks ago
29 weeks ago Link To Comment
I hope that if it comes to that, that I correctly have the impression that many others will be behind me, when I stand up* shooting.

*Metaphorically of course. Any time you can, fire from cover.

awrm.org
29 weeks ago
29 weeks ago Link To Comment
Yet almost no one in Washington is challenging the Constitutionality of Social Security. It needs to be phased out and dismantled, not "fixed".

29 weeks ago
29 weeks ago Link To Comment
" Obama administration’s proposal to place a $3 million cap on money accumulated in retirement accounts."

And yet many public service and government workers retire early with pay and benefits valued near or even above $3 million and they contribute only a small fraction of that while they are working . . but yes, let's attack anyone who actually earns and saves that much.

The real solution is for all of us in the private sector to demand to be treated like government workers. We will all get a nice pay increase over what we are now making and then retire at age 55 with 90% of our pay and gold-plated health insurance for life. Problem solved - except perhaps for where the money will come from. But why should we worry about that of the government doesn't?

The dirty little secret is that the only reason that the government types can get and enjoy such great deals is because the rest of us don't - - in fact the rest of us pay them. Then they go around scolding the private sector for not being more like them. If only we could show them how worthless their money would become if everyone could demand and get high pay, immunity from lay-off, lax work rules and lavish retirement benefits.
29 weeks ago
29 weeks ago Link To Comment
Experts and lawmakers and government, Oh My !

Sorry Dorothy, but you are not in mid 20th century Kansas anymore,
living under a weak, solvent, and relatively honest federal government;
The US is bankrupt, as are all the rest of the countries in the 1st world.
They will be sending out their army of flying monkeys to collect all of
the remaining wealth in the world, leaving little for workers and none
for retirees; Us old geezers need to find a job, or live with our children.
29 weeks ago
29 weeks ago Link To Comment
Brown & Toomey, Hell NO!!! Everything government touches goes to hell. Probably explains why they're so good at war. I'd rather have Chinese thieves from Macau overseeing my pension than the Feds. Every social welfare program the Fed has ever embarked on was built on lies and deceit by politicians to create yet another unsustainable Ponzi scheme that employs tens of thousands more Federal employees who contribute nothing to the economy, could care less about their new "wards of the state" as long as they get their 5-6 figure government cheese at taxpayer expense. The only people who get screwed are the taxpayers who are coerced into going along with this crap. Everybody should write and call Brown and Toomey and their own Federal politicians and tell them keep their hands off pensions or doing anything else to help the plight of us poor, stupid folk whom they claim to be helping.
29 weeks ago
29 weeks ago Link To Comment
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