A] Prelude
For more information on pension systems, risk and coverage, feel free to visit our dedicated webpages:
https://expatpensionholland.nl/usa-expat-pensions
https://expatpensionholland.nl/global-pillars-systems
https://expatpensionholland.nl/global-investments-risks-0
https://expatpensionholland.nl/global-social-security-coverage
For even more information feel free to visit the following external sites:
https://www.help.senate.gov/imo/media/doc/independent_retirement_fairness_act.pdf
https://www.futureplan.com/resources/news-articles/bill-to-improve-gig-worker-access-to-retirement-introduced/
B] The Issue
Retirement proposals for workers without an employer-sponsored retirement plan were front and center at a Senate Health, Education, Labor, and Pensions (HELP) Committee meeting. Senator Bill Cassidy, (R-LA), chair of the HELP Committee, delivered opening remarks on how to empower gig workers to access portable workplace benefits, like health care and retirement, in his legislation aimed at improving retirement security of freelance and gig workers called the Independent Retirement Fairness Act that he introduced last week in the Senate.
C] The Details
“The American workforce looks much different than it did 10, even 5 years ago …,” said Sen. Cassidy. “There are now more than 27 million Americans who work as independent contractors. None of them should have to choose between a flexible work schedule and having a 401(k) or health coverage. Congress must modernize labor laws to catch up to the 21st century economy and meet the needs of today’s workers.”
Then Senator Bernie Sanders (I-VT), Ranking Member of the HELP Committee, introduced the Pensions for All Act, sweeping legislation that would provide comprehensive retirement coverage to the more than 56 million working-class Americans who currently have no retirement plan through their employer.
“We can no longer tolerate a rigged retirement system that allows the CEOs of large corporations to receive massive golden parachutes for themselves, while denying workers a pension after a lifetime of work,” Sanders said. “If we are serious about addressing the retirement crisis in America, corporations must be required to offer all of their workers a traditional pension plan that guarantees a monthly income in retirement.
And if corporations refuse to offer a decent retirement plan, their workers must be allowed to receive the same type of pension that every member of Congress receives. If we can guarantee a defined benefit pension plan for members of Congress, we can and we must provide that same level of retirement security to every worker in America.”
Nearly half of workers between the ages of 55 and 64 have no retirement savings at all and no idea how they will be able to retire with any shred of dignity or respect, said Senator Sanders. “If Congress can provide over $1 trillion in tax breaks for the top 1% and over $900 billion in tax breaks for large corporations, please do not tell me that we cannot afford to make sure that every worker in America can retire with the dignity and the respect they deserve,” he said.
D] Corporate Requirements
The Pensions for All Act would reverse this trend by requiring corporations to either:
A] Provide a traditional pension plan for their workers that is at least equivalent to the plan provided to new members of Congress under the Federal Employees Retirement System (FERS) or
B] Pay into the federal retirement system at a level that ensures all of their workers receive the same amount of retirement benefits as Members of Congress.
Importantly, this legislation would also offer reduced contribution requirements for self-employed workers and small businesses.
E] Finally
“Fifty years ago, nearly 50% of American workers had a pension. Today, less than 10% do, and nearly half of older workers have no retirement savings at all,” said UAW President Shawn Fain. “We’ve gone from being a country that promised security and dignity in old age to being a country that forces people to work until they’re in the grave.
“After a lifetime of hard work, every American deserves the promise of a secure, dignified retirement. Pensions have long been the bedrock of retirement for working-class people. Every Member of Congress has a guaranteed pension—for life. If it’s good enough for them, it’s good enough for the people who build this country … it’s time for Congress to act.”
Finally it is good to see that this type of legislation is not unique for the U.S. as it has been recently become law in among others Ireland.