Bipartisan US senators are proposing legislation in an effort to secure workers’ retirement benefits in the long run, through the formation of a new retirement commission that would guide private retirement plans to a more sustainable future.
Coined the Federal Retirement Commission Act, Sens. Todd Young, an Indiana Republican, and Cory Booker, a New Jersey Democrat, would create a group responsible for reviewing private benefit programs and submitting to Congress recommendations on how to improve or replace the programs. Their judgements would be mandated to consider societal trends such as wage growth, health care costs, life expectancy, serial employment, and shrinking household size, with a focus on moving from defined benefit to defined contribution models.
“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 in a statement.
The bill would essentially restructure these private pension plans to run more efficiently and effectively. The Senate Finance Committee held a hearing on the issue after its introduction, where it was widely regarded as a top priority for Congress given the troublesome financial situations many retirees face.
The bill comes on the heels of the 2017 Government Accountability Office Report, which concluded an independent panel of experts would be valuable to address the needs of the current environment and improve the nation’s collective retirement security.
It’s been over 40 years since a federal commission completed an investigation of the retirement system at the magnitude the two senators are proposing. The last time was Jimmy Carter’s 1979 executive order to complete a two-year study of the pension system and the future of the nation’s retirement income policies.
“Private retirement systems have undergone significant changes over the past 40 years as traditional pensions have become less common,” Young said in a prepared statement. “Individuals must now prudently plan for their own retirement security through retirement savings accounts like 401(k) plans.”