More Than Social Security; Universal Retirement Access for All

noun

1. A system to make retirement accounts readily available to every worker

Social Security retirement benefits are wonderful — guaranteed monthly checks going out to workers who paid into the system. But Social Security is more meager than most people expect, and the program was meant as a supplement or a retirement stopgap, to replace only about 40% of a worker’s income.

The number of people with access to pension plans has plummeted since 1975, according to Department of Labor data. As union membership fell and corporations slashed benefits, responsibility to plan retirement moved from the employer to the worker; today, only about half of workers participate in any retirement plan at all. 

What’s more, nearly 6 million Americans over 65 live below the poverty line. One study shows universal access could cut poverty among older Americans by more than a quarter by 2045. 

The key idea is simple: Every worker, no matter the job, should have a reliable way to build a nest egg.

Legislators from both parties have floated versions of the idea, like the ​“Automatic IRA” proposal, and more recently, states like California and Oregon have rolled out their own savings programs for workers who don’t get retirement benefits on the job. These state programs are small-scale but show that automatic savings systems can work — and could be expanded nationwide. 

More recently, Sen. Bernie Sanders (I-Vt.) introduced the Pensions for All Act, which would expand retirement coverage to millions of Americans without employer sponsored plans. This legislation proposes requiring employers to either offer a pension program equivalent to, or better than, the pension plan offered to members of Congress — or contribute to and enroll their employees in the retirement system provided to federal workers. 

And there is precedent. During the Great Depression, the Townsend Plan called for a national sales tax to fund a monthly $200 pension (more than $5,000 today, accounting for inflation) for all Americans over 60. While we never got a Townsend Plan, that political demand in a time of severe economic struggle is what arguably gave birth to what we do have — Social Security.