Americans Agree: Retirement System Needs Reform

WASHINGTON—A new poll conducted by the National Institute for Retirement Security (NIRS) shows strong support for reforming the retirement system—a top priority of Senate Health, Education, Labor, and Pensions (HELP) Committee Chairman Tom Harkin (D-IA). Among other findings, the NIRS poll showed that 85% of respondents are concerned about their ability to have a secure retirement, and 87% said that the recent economic downturn exposed the fragility of our retirement system.

Harkin has proposed the creation of a new retirement plan, USA Retirement Funds, that would create privately-run, universally-available savings plans providing a monthly stream of income in retirement that cannot be outlived.  The NIRS poll found strong public support for such a proposal, with 74% of respondents believing it to be a good idea. 

“These statistics tell the same story I have heard from folks all over Iowa: the dream of a secure retirement is fading for American workers. With stagnant wages, rising costs of living, and traditional pensions disappearing, more families are relying on Social Security, which simply does not pay enough to provide financial security in retirement. Even workers who have some savings rarely have enough to ensure a secure retirement, and turning those savings into monthly income is both expensive and challenging. My proposal will make it simpler for people to save for retirement, and provide a reliable income stream that retirees cannot outlive,” Harkin said.

Features of Harkin’s USA Retirement Fund plan scored high marks in the poll:

• 90% of respondents said that every American should have the opportunity to participate in a pension plan.
• The Harkin plan would ensure that every working person has access to a pension by asking employers that do not already offer a pension or qualifying 401(K) to provide access to a USA Retirement Fund.

• 82% said it is getting harder to prepare for retirement.
• The Harkin plan would automatically enroll participants to make it easier for people to participate and would feature professional asset management to help people grow their savings.

• 75% said that stock market volatility makes it impossible for average Americans to predict the value of their savings in the future.  
• The Harkin plan would spread the risk of investments over large groups of workers so that a sudden, temporary downturn would have only a small impact on the monthly income of retirees.

• 86% said the prospect of living longer makes it more difficult to prepare for retirement, and 92% agreed that a retirement plan should provide a monthly check in retirement.  
• USA Retirement Funds would provide retirees with a monthly stream of income that they could not outlive.

• 88% said that the do-it-yourself approach to retirement makes it tough to be prepared.
• USA Retirement Funds would feature automatic enrollment, professional management, and lifetime income payouts, giving retirees the benefits of a traditional pension without burdening employers with the responsibility and risk of pension management.

• 92% said that retirement benefits should be portable so you can take them from job to job.
• The benefits people earn in a USA Retirement Fund would be portable so that workers can keep earning a pension benefit, even when they change jobs.

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