Cartwright Introduces Legislation Aimed at Tackling Nation’s Retirement Crisis
Washington, DC – Today, U.S. Congressmen Matt Cartwright (PA-17) and Keith Ellison (MN-05) introduced the USA Retirement Funds Act. The bill is based on similar legislation introduced in the U.S. Senate by Senator Tom Harkin (D-IA).
With only one in five people having a defined-benefit pension plan and half of workers having no plan at all, the U.S. continues to face a growing retirement crisis. Additionally, as half of Americans have less than $10,000 in savings and 85 percent of Americans report that they worry about their prospects for retirement, the need for reform to the nation’s retirement system has never been greater.
“There is strong public support for reforming the retirement system,” said Rep. Cartwright. “A recent study by the National Institute for Retirement Security found a majority of Americans agree there is a need for a strong, universal pension system, and 90 percent favor a plan that is available to all Americans, is portable, and provides a monthly check throughout retirement.”
“I congratulate Mr. Cartwright on introducing the Universal Coverage Retirement Funds Act,” said Rep. Ellison. “His bill would enable millions more Americans to attain retirement security by increasing their access to better retirement plans at work.”
The bill tackles the retirement crisis head-on by ensuring that people currently without access to a workplace retirement plan would finally have the opportunity to earn a safe and secure pension benefit for life. The key features of USA Retirement Funds include:
- Universal Coverage: USA Retirement Funds would be available to everyone, including the more than 62 million people without access to a workplace retirement plan and the 14.5 million people who are self-employed.
- Automatic Enrollment: Employees would be automatically enrolled at a rate of 6 percent per year, but could choose to raise, lower, or stop their contributions.
- Secure Lifetime Income: Benefits would be paid monthly for life, and participants would be shielded from market volatility and other risks.
- Lower Costs: Pooled, professional management and risk sharing will reduce the cost of retirement by up to 50 percent.
- Portability: People would be able to take their benefit with them as they change employers.
- Simple and Easy for Businesses: Small businesses can easily participate and would not have to take on risk or administrative burden.
“USA Retirement Funds would represent a big step forward in addressing our retirement income crisis. The proposal combines some of the best elements of a traditional pension—including regular lifetime payments in retirement, professional management, and pooled investing—with elements of a 401(k), such as predictable costs for employers and portability for workers,” said David Madland, the Center for American Progress’ Managing Director of Economic Policy. “Our research finds that plans like USA Retirement Funds cost about half as much to provide an adequate retirement benefit as a typical 401(k), while exposing participants to much lower levels of risk. USA Retirement Funds would provide workers with a secure lifetime income without requiring employers to take on long-term liabilities.”