Everyday Americans are finding it increasingly hard to cover their daily expenses. So it's not surprising that saving for retirement is falling behind. But many companies are making it even more difficult by reducing benefits and options for their workers.
|Rep. Marcy Kaptur talked pensions on Capitol Hill in June.
A report earlier this year found that the U.S. ranks only 19th
in the world when it comes to retirement security, behind Iceland and just barely in front of Slovenia. That's nothing short of an embarrassment for this country. But it is not surprising given the reduction in pensions, the fluctuations in 401(k) savings plans and continued talk of raising the retirement age for Social Security.
The Teamsters have taken an active role
in fighting to protect retirees' and workers' nest eggs. The IBT and other unions got behind the Keep Our Pensions Promises Act (KOPPA), introduced earlier this year by Sen. Bernie Sanders (I-Vt.) and Rep. Marcy Kaptur (D-Ohio). It's more essential now than ever.
On Thursday, the U.S. Treasury Department will hold a hearing in Washington on finalizing a rule that opens the door to pension cuts. This would be the first time since President Ford signed the Employee Retirement Income Security Act (ERISA) into law that pension retirement security would be compromised.
The futures of some 1.5 million workers who are enrolled in about 200 retirement plans nationwide are at risk, and potentially many more in the future if we do not act. The U.S. must take action now and stand up to these cuts. Lawmakers owe it to hardworking Americans who have earned the ability to retire with dignity. They must stand up to these cuts and restore ERISA’s protections before time runs out.
Similar attention needs to be focused on expanding, and not shrinking, Social Security. More lawmakers seem interested in making hardworking Americans work even longer to receive benefits than expanding the successful program to make sure people can have a more comfortable life in their golden years. It's nothing more than a trick, as the National Journal noted
Raising the Social Security retirement age ... means that future retirees will get smaller payouts than previous ones did after starting to collect benefits at the very same age. The differences can be dramatic, as the following example illustrates: If, under the current cutoff, you’re eligible for $1,000 at age 67, you could instead choose to get $700 a month for retiring at 62 or $1,240 a month for retiring at 70. But if the retirement age was increased to 70—a number mentioned by John Boehner, Jeb Bush, and Chris Christie—the $1,000 benefit at 67 turns into $800, the $700 benefit at 62 turns into $565, and the $1,240 benefit at 70 turns into $1,000.
These cuts matter significantly on the level of the individual. But, even if Social Security as a whole were in crisis (it’s not), cutting the benefits that people can collect before age 70 wouldn’t even be a particularly effective way of closing any budget gaps: Increasing the retirement age from 67 to 68 would erase 12 percent of the deficit that Social Security is expected to face 75 years from now.
As it stands, nearly two-thirds of retirees
count on Social Security for half or more of their retirement income. For more than 30 percent of retirees, the funds make up 90 percent or more of their income. It may not be right, but it is true.
Policymakers cannot in good faith turn a blind eye to these numbers. Everyday Americans are counting on them. It's time to take a stand for workers and retirees who don't have friends in high places. They must do the right thing.