By Rap Lewis
Senator Tom Harkin is embarked on a crusade to provide security for workers in retirement by rebuilding the nation’s private pension system.
The Iowa Democrat chairs the Senate Committee on Health, Education, Labor and Pensions, known as the HELP Committee. Over the past two years, the HELP Committee has held a series of hearings on retirement security issues. In a new report, Harkin summarizes the findings of those hearings:
- There’s a $6.6 trillion gap between the amount U.S. workers have actually saved toward retirement and the amount they should have saved.
- Half of all Americans have less than $10,000 in savings.
- Only one in five Americans will receive pension income in retirement.
- In 2010, nearly 6 million Americans over the age of 65 lived in poverty, and the number is growing.
“For most of the middle class the dream of a secure retirement is slipping out of reach. We are facing a retirement crisis,” Harkin said. “I intend for this report to be a starting place in an evolving discussion about retirement security.
“Over the coming months, I plan to bring together business and labor leaders, policy experts, advocates, and my fellow lawmakers to implement necessary reforms. The retirement crisis is simply too big to ignore, and it is time for us to roll up our sleeves and get to work.”
Harkin proposes to address the crisis by creating a new type of privately-run retirement plan he calls “Universal, Secure and Adaptable (USA) Retirement Funds. The new plan would combine the advantages of traditional pensions – that is, lifetime benefits and pooled, professional management – with 401(k) portability and ease for employers.
This would give working families a path to a secure retirement benefit that they could take with them when they change jobs, and that they cannot outlive.
USA Retirement Funds would also make it simple for small employers to offer a benefit without having to shoulder the risk and the administrative burden.
The 75 million Americans who lack a workplace retirement plan could use existing payroll withholding systems to make automatic contributions toward their retirement.
Harkin’s proposal is intended to start a discussion. Interested persons should convey their ideas to Harkin by email at Retirement_Security@help.senate.gov or by regular mail to Retirement Security Project, Senate Comittee on Health, Education, Labor and Pensions, 428 Dirksen Office Building,Washington, DC 20510.