Gilding the Golden Years
We in this country have a wave of citizens looking forward to their Golden Years, perhaps more by percentage than we have ever had in our history. What many of these good people will learn will come as a shock: we have yet in these United States to decide that a person's income during retirement is sacred. Too many of our nation's company leaders have targeted their pension and retirement "savings" plans as yet another cost that should be cut, never mind the negative impact on those whose productive, working lives are behind them.
Take for example United Airlines. According to PBS's Frontline, in December, 2002, United filed for Chapter 11 bankruptcy, a legal maneuver that allowed them to slash the retirement benefits of its retirees by a third. Imagine for even a moment if you at home found your take-home pay reduced to one-third its present amount. Would you be able to afford the mortgage or rent? Would you be able to continue commuting to work? What food do you currently enjoy would have to be curtailed or abandoned altogether? Now imagine that, since you are retired, this is your only possible source of income.
With my election, I will strive to end this travesty. Three horrible retirement oversights currently exist that must be fixed immediately. First of all, I will close the loophole that allows corporations to file for any form of bankruptcy and slash the pension benefits received by its past retirees. Should a company go bankrupt and decide to touch pension benefits by even one red cent, that company should be honest and simply liquidate its holdings, never to do business again.
Secondly, again according to the Frontline piece, did you know that 401(k) retirement programs, currently all the rage in business today, originally started as a 1978 tax shelter to corporate executives at Xerox and Kodak? At no time when drafting the legislation that governs the retirement of over 16 million Americans were the concerns of middle-income earners ever considered. As a result, most people's retirement portfolios are both horribly under-funded and, worse, subject to losses in the market.
Thirdly, retirement programs are almost always available only to those who make a single employer their full-time occupation, leaving too many part-time and multiple job workers without savings for their lives beyond work. I myself for several years managed up to three jobs to make ends meet. From that period, I worked hard but had little in retirement savings to show for my efforts. I can personally attest to the fact that millions of hard working Americans find themselves in this same position.
If elected, I will strive to change these fundamentally unfair problems. I will establish legislation that creates Portable Pension Programs, retirement portfolios to which any American can contribute at any time in his or her working life. Should they so choose, they can without penalty roll over 100% of their 401(k) savings into these accounts. Furthermore, to these funds employers will be able to contribute whatever percentage they deem fair. This will let employers to invest in their workers' future as they do today, but allow them to divest themselves of the expensive responsibility that comes with overseeing pension plans.
What will distinguish these accounts from our current options? These will be professionally managed accounts where a guarantee of 100% of contributions will apply to the worker's retirement, meaning no one need worry ever again about losing their future to the whims of market crashes or inept 401(k) managers. I will strive to develop a retirement division of a federal agency similar to the Federal Deposit Insurance Corporation, or perhaps simply extend the authority of that agency to include issuers of Portable Pension Programs, that will oversee the fund managers and, should the fund become partially or fully insolvent, pay the pensioners exactly what they contributed. The same social safety net that guaranteed depositors in Washington Mutual, like myself, would oversee retirement pension plans.
And let me further clarify that these plans would be true pensions, not lump-sum payouts that are allowed under the 401(k) system. Again from the Frontline piece, the State of Nebraska tried different systems side-by-side for forty years. They discovered that even though the two plans got identical contributions from both workers and the State, the pension plan systems kept workers financially solvent far better than the lump-sum option, meaning fewer retirees in their later years found themselves with severe money worries.
The money distributed from these plans would come in pension payouts by-weekly, just as paychecks do during one's working life. The amount one keeps in one's Personal Pension would be calculated to distribute after one stops working just as one's Social Security does. Should you decide to retire early, you would receive less per check. Remember, though, that unlike the personal savings accounts all the rage with those who do not care about their workers after they leave the firm, Personal Pension Programs plans would pay retirees until the day they die. This will be guaranteed by law.
Strengthening the lives of those whose working days are behind them, allowing them to pursue life without donning blue vests and hanging around store doors acting goofy but really just watching for shoplifters, will in turn strengthen the lives of all of us in these United States. To quote Adam Smith once again, ". . . what improves the circumstances of the greater part can never be regarded as an inconveniency to the whole."
Predictably, Wall Street will hate these plans. Wall Street loves 401(k) programs simply because they can use these funds to play the market and face no penalties when the funds lose value to market losses. This allows Wall Street bankers to play fast and loose with your money and then leave you with the losses, just as they have done to our housing market, just as they have done to our money supply.
Elect me, and your retirement will be secure for you.
Take for example United Airlines. According to PBS's Frontline, in December, 2002, United filed for Chapter 11 bankruptcy, a legal maneuver that allowed them to slash the retirement benefits of its retirees by a third. Imagine for even a moment if you at home found your take-home pay reduced to one-third its present amount. Would you be able to afford the mortgage or rent? Would you be able to continue commuting to work? What food do you currently enjoy would have to be curtailed or abandoned altogether? Now imagine that, since you are retired, this is your only possible source of income.
With my election, I will strive to end this travesty. Three horrible retirement oversights currently exist that must be fixed immediately. First of all, I will close the loophole that allows corporations to file for any form of bankruptcy and slash the pension benefits received by its past retirees. Should a company go bankrupt and decide to touch pension benefits by even one red cent, that company should be honest and simply liquidate its holdings, never to do business again.
Secondly, again according to the Frontline piece, did you know that 401(k) retirement programs, currently all the rage in business today, originally started as a 1978 tax shelter to corporate executives at Xerox and Kodak? At no time when drafting the legislation that governs the retirement of over 16 million Americans were the concerns of middle-income earners ever considered. As a result, most people's retirement portfolios are both horribly under-funded and, worse, subject to losses in the market.
Thirdly, retirement programs are almost always available only to those who make a single employer their full-time occupation, leaving too many part-time and multiple job workers without savings for their lives beyond work. I myself for several years managed up to three jobs to make ends meet. From that period, I worked hard but had little in retirement savings to show for my efforts. I can personally attest to the fact that millions of hard working Americans find themselves in this same position.
If elected, I will strive to change these fundamentally unfair problems. I will establish legislation that creates Portable Pension Programs, retirement portfolios to which any American can contribute at any time in his or her working life. Should they so choose, they can without penalty roll over 100% of their 401(k) savings into these accounts. Furthermore, to these funds employers will be able to contribute whatever percentage they deem fair. This will let employers to invest in their workers' future as they do today, but allow them to divest themselves of the expensive responsibility that comes with overseeing pension plans.
What will distinguish these accounts from our current options? These will be professionally managed accounts where a guarantee of 100% of contributions will apply to the worker's retirement, meaning no one need worry ever again about losing their future to the whims of market crashes or inept 401(k) managers. I will strive to develop a retirement division of a federal agency similar to the Federal Deposit Insurance Corporation, or perhaps simply extend the authority of that agency to include issuers of Portable Pension Programs, that will oversee the fund managers and, should the fund become partially or fully insolvent, pay the pensioners exactly what they contributed. The same social safety net that guaranteed depositors in Washington Mutual, like myself, would oversee retirement pension plans.
And let me further clarify that these plans would be true pensions, not lump-sum payouts that are allowed under the 401(k) system. Again from the Frontline piece, the State of Nebraska tried different systems side-by-side for forty years. They discovered that even though the two plans got identical contributions from both workers and the State, the pension plan systems kept workers financially solvent far better than the lump-sum option, meaning fewer retirees in their later years found themselves with severe money worries.
The money distributed from these plans would come in pension payouts by-weekly, just as paychecks do during one's working life. The amount one keeps in one's Personal Pension would be calculated to distribute after one stops working just as one's Social Security does. Should you decide to retire early, you would receive less per check. Remember, though, that unlike the personal savings accounts all the rage with those who do not care about their workers after they leave the firm, Personal Pension Programs plans would pay retirees until the day they die. This will be guaranteed by law.
Strengthening the lives of those whose working days are behind them, allowing them to pursue life without donning blue vests and hanging around store doors acting goofy but really just watching for shoplifters, will in turn strengthen the lives of all of us in these United States. To quote Adam Smith once again, ". . . what improves the circumstances of the greater part can never be regarded as an inconveniency to the whole."
Predictably, Wall Street will hate these plans. Wall Street loves 401(k) programs simply because they can use these funds to play the market and face no penalties when the funds lose value to market losses. This allows Wall Street bankers to play fast and loose with your money and then leave you with the losses, just as they have done to our housing market, just as they have done to our money supply.
Elect me, and your retirement will be secure for you.