Chesterton Tribune

 

 

Indiana Senator Todd Young seeks commission to review private retirement programs

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U.S. Senators Todd Young, R-Ind., and Cory Booker, D-N.J., are announcing new legislation to establish a federal commission charged with reviewing private retirement benefit programs and submitting a report to Congress on how to improve private retirement security in the United States.

“The commission would not review the Social Security program, as it is outside of its scope,” according to a joint statement released this week.

“America’s private retirement system faces major challenges in the modern economy, and research shows that far too many households are unprepared for retirement,” the statement said. “The Employee Benefit Research Institute predicts that over 40 percent of Gen X-ers will run short of money in retirement, and just under half of all private-sector workers aren’t participating in a retirement savings plan through their employer.”

“Private retirement systems have undergone significant changes over the past 40 years as traditional pensions have become less common,” the statement said. “Individuals must now prudently plan for their own retirement security through retirement savings accounts like 401(k) plans. Further, today, our economy is undergoing another shift, as workers are more likely to work in the ‘gig economy,’ defined by serial employment or the contingent workforce. For these workers, it is particularly difficult to save for their own retirement.”

“With many individuals reaching retirement with little to no savings of their own, we must take a serious look at our current retirement programs and make the changes necessary to help secure the futures of so many hardworking Americans,” Young said. “Our bill would enact a commission to better understand how we can strengthen private benefit programs and ensure our current and future generations have the tools necessary to plan for retirement.”

This legislation follows a report last year by the Government Accountability Office that recommended the creation of an independent panel of experts to assess the current system and make recommendations to improve the nation’s collective retirement security. It has been nearly 40 years since a federal commission has conducted a survey of this scope.

Specifically, the Federal Retirement Commission Act would create a commission charged with, among other things, a comprehensive review of private benefit programs, with a particular focus on moving from defined benefit to defined contribution models; a review of private retirement coverage, individual and household accounts balances, investment trends, costs and net returns, and retention and distribution during retirement; and a review of societal trends, including wage growth, economic growth, unique small business challenges, serial employment, gig economy, health care costs, life expectancy, and shrinking household size, that could lead future generations to be less financially secure in retirement compared to previous generations.

 

Posted 4/26/2018

 

 
 
 
 

 

 

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