Harkin Report

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Te RetirementCrisis and a Planto Solve It

Chairman om Harkin

428 Senate Dirksen Oce BuildingWashington, DC 20510

www.help.senate.govemail: [email protected]

July 2012


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LETTER FROM THE CHAIRMAN

Ater a lietime o hard work, people deserve the opportunity to live out their golden yearswith dignity and nancial independence. But or most o the middle class, the dream o a secureretirement is slipping out o reach. We are acing a retirement crisis. Consider the ollowing:

Te retirement income decit i.e., the dierence between what people havesaved or retirement and what they should have at this point is $6.6 trillion;

Only one in ve people in the private sector workorce has a dened benetpension plan; and

Hal o Americans have less than $10,000 in savings.

Te retirement crisis will have signicant repercussions. As older Americans transition outo the workorce, either voluntarily or involuntarily, many will nd that they cannot aford basicliving expenses. Tey will be orced to make the dicult choice between putting ood on the

table and buying their medication. Te retirement crisis will put an enormous strain on ouramilies, our communities, and our social saety net.

Te retirement crisis is directly attributable to the breakdown o the traditional three-leggedstool o retirement security pensions, savings, and Social Security. Dened benet pensionplans used to play an enormous role in providing a reliable source o retirement income, but thepension system has been in decline or decades. At the same time, stagnant wages and risingcosts are making it harder and harder to build up a nest egg through a retirement savings plan(e.g., a 401(k) or IRA) or otherwise. Fortunately, Social Security is still strong, but it was alwaysintended to be supplemented by other sources o retirement income.

I am committed to ensuring that middle class amilies have a secure retirement. Tat iswhy I have been holding a series o hearings in the Senate Committee on Health, Education,Labor, and Pensions to highlight the state o retirement security and better understand howwe can improve the system. Tis report summarizes the key ndings rom those hearings andincludes two bold proposals to address the retirement crisis. Specically, I propose providinguniversal access to a new type o retirement plan Universal, Secure, and Adaptable (USA)Retirement Funds that can deliver real retirement security or all working Americans. I havealso proposed improvements to Social Security that will increase benets and make the programstronger or uture generations.

I intend or this report to be the starting place in an evolving discussion about retirement

security. Over the coming months, I plan to bring together business and labor leaders, policyexperts, advocates, and my ellow lawmakers to implement necessary reorms. Te retirementcrisis is simply too big to ignore, and it is time or us to roll up our sleeves and get to work.

Sincerely,

Senator om HarkinChairman


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US Senate HELP Committee | JULY 2012 2

Retirement. Te word used to conjure up images otravelling, pursuing new hobbies, or spending time withthe grandkids. But these days, when people think about

retirement, all they do is worry. Not having enough savingsor retirement is one o peoples biggest economic ears,and a recent survey ound that 92% o people think thereis a retirement crisis in America.1

Retirement (In)security

As a country, we are woeully unprepared or retirement.Hal o all Americans have less than $10,000 in savings,and nearly hal o the oldest Baby Boomers are at risk onot having sucient retirement resources to pay or basic

retirement expenses and healthcare costs.2

Te Center orRetirement Research at Boston College estimates that ourretirement income decit is $6.6 trillion. 3 Tat numberrepresents the gap between the pension and retirementsavings that American households have today and whatthey should have today to maintain

their standard o living in retirement. Tat is enoughdollars that, i lined up end to end, they would stretch

to the moon and back 1,000 times and still leave enoughlet over to pay NASAs budget or the next eight decades.

Te public is becoming increasingly concerned aboutthe lack o retirement security. Only 14% o people saythey are very condent they will have enough money tolive comortably in retirement.4 Tat is down 9% since2002.5 And 69% o people believe they could save until age65 and still not have enough.6 Employers are even more

pessimistic; only 4% are very condent their employeewill retire with sucient assets. Tat is down rom 30%in 2011.7

Breakdown of the Three-legged Stool

Te retirement crisis is directly attributable to theailure o the three-legged stool o retirement securityraditionally, dened benet pension plans (pensions)personal savings, and Social Security were seen as the threepillars creating a solid oundation or our retirement systemEach should play an important role in supporting peoplein old age. However, the stool, never sturdy, has becomeincreasingly wobbly as pensions have disappeared and the

middle class is nding it harder and harder to save.

Disappearing Pensions

Dened benet pensions which provide people witha lietime benet based on a ormula that usually takesinto account a persons years o service and salary usedto play an enormous role in providing a sae and secureretirement or many in the middle class. Although coveragehas never been universal, pensions have successully helpedmillions o people prepare or retirement by providing asecure, guaranteed benet or lie. Pensions are regulated

to protect participants against mismanagement, and theyshield people rom the risk o market downturns and thepossibility o living longer than expected. However, thepension system has been in a steady decline or decadesand now, only one out o every ve people working in theprivate sector has a pension.8

Tese days, employers have largely stopped oeringpensions at all. Tose that choose to ofer their employeea retirement plan tend to provide dened contributionplans (DC Plans), such as 401(k) plans. DC Planallow people to save or retirement on a tax-advantagedbasis and are more attractive to many employers becausethey shit virtually all o the risks associated with the planto employees. Employers typically are not responsible orinvestment losses in a DC Plan, and they are not requiredto make contributions or their employees. DC Planscan be an eective way to help people save or retirementbut they are not a substitute or pensions because they donot provide people with the same level o protection rom

THE RETIREMENT CRISIS

I, like millions o peoplein this country, have

worked all my lie, and Ihave worked very hard.And I have no retirement savings atall. None.

Karen OQuinn


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US Senate HELP Committee | JULY 20123

nancial risk and do not provide a guaranteed stream oincome or lie.

Te decline o the traditional pension is going to havereal consequences or individuals and amilies. Pensions areone o the simplest, most cost-eective means o securinga source o retirement income and an important source oprotection or amilies against economic risk. Tey are also

an extremely efective means o keeping older Americans outo poverty. Research indicatesthat the poverty rate in 2010or older households lackingpension income was ninetimes greater when comparedto households with pensionincome.9

In addition to providingeconomic security to

individuals, pensionsprovide enormous benetsto our economy and playan instrumental role in jobcreation.10 Every dollar thatgoes into a pension plan is heldin trust or a benet that maynot need to be paid or 40 yearsor more. Consequently, pensions are able to invest thosedollars over long time horizons. Tat means they are ableto provide critical sources o nancing or long-term projects

like technology and inrastructure development.11 Pensionsare also able to make investments in good times and bad, sothey are an important source o liquidity during economicdownturns, such as the Great Recession, when banks andother nancial institutions slow or stop their lending. Inshort, pensions make the kinds o consistent, long-terminvestments in our economy that spur innovation and createjobs. As pensions disappear, we are losing a key source oinvestment capital and a driving orce behind our economy.

Retirement Savings & the Middle Class Squeeze

At the same time as middle class amilies have seentheir pensions disappear, economic conditions are makingit tougher and tougher or people to save through DCPlans or on their own.12 People are working longer andharder than ever beore, and productivity has steadilyincreased. However, worker compensation has been fator negative over the past our decades, and costs o livinghave been increasing. Te middle class is being squeezed,and we are at a point where hal o households would not

even be able come up with $2,000 in 30 days i acedwith an emergency.13 For many years, amilies were ableto mask the eects o stagnant wages and rising costs bybecoming two-income households, working more, andrelying on credit. But the Great Recession exhaustedthose coping mechanisms and exposed the underlyingeconomic challenges acing the middle class.14 Now, themiddle class is struggling just to keep its head above water

With the signi i canteconomic challenges acingamilies, it should be no surprisethat the middle class nds itdicult to save. As notedabove, hal o Americans haveless than $10,000 in savingsand 60% o the populationhas less than $25,000. Terehave been many positive

developments to help peoplesave by expanding access toDC Plans and acilitatingautomatic savings. Howeverdespite all o those eortssavings rates are still too lowand people are less likely toreport that they are saving or

retirement than just a decade ago.15

Social Security: Strong but Not Enough

Fortunately, Social Security continues to provideamilies with a basic level o income security. It preventmillions o Americans rom slipping into poverty whentheir working years are over because, like a pension, SociaSecurity provides Americans with an income stream thatthey cannot outlive. However, Social Security was nevermeant to be peoples sole source o retirement incomeTe program replaces only about 40% o the averagepersons income ater retiring, but people typically need65-85% percent o pre-retirement earnings to maintain

their standard o living.

16

Tus, a robust private retiremensystem is absolutely essential to give ordinary people anopportunity to retire.

Cost of the Crisis

Te breakdown o the three-legged stool o retiremensecurity and the resulting retirement crisis are going to havevery real costs. In 2010, nearly 6 million Americans aged 65and over were living in poverty or near-poverty.17 By 2020

Pensions are vitally importantor keeping older Americans out opoverty. Te poverty rate in 2010or older US households lackingpension income was nine timesgreater as compared to householdswith pension income.

Diane OakleyNational Institute on Retirement Security


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that number is expected to increase by 33%. Given that anincreasing number o older people are reaching retirementage without income to supplement Social Security, wecould see even higher poverty rates in the uture. Tistrend will place enormous new burdens on amilies, andit will strain our social saety net, which is already acingsignicant nancial constraints.

Older people without adequate retirement savings willhave trouble just making ends meet. Many will need long-term care, but ew seniors will be able to aord it. As aresult, they will have to rely on their amilies or support.Tis will put a strain on working amilies, who are alreadystruggling to cope with stagnant wages, rising living costs,and the lingering efects o the Great Recession. It will alsomake it more dicult or younger amily members to saveor their own retirement.

In addition to the strain on amilies, the retirement crisis

will have a signicant impact on government programs thatprovide assistance to poor or near-poor retirees. As peopleare unable to aford basic living expenses in retirement, they

will rely more and more on programs like housing assistance,home heating aid, and ood assistance. Elder poverty will

also increase Medicare and Medicaid costs because seniorsliving in or near poverty oten have higher incidences ochronic and acute health problems and are also less able toaord private long-term care services. Te increased costswill undoubtedly strain our social saety net.

Te retirement crisis will have a signicant human cosas well. Lie will be extraordinarily dicult or seniorswithout adequate income in retirement. Ater a lietimeo hard work, many seniors will nd themselves orcedto choose between putting ood on the table and buyingtheir medication. And many people simply will not beable to leave the workorce. Tey will have to work welinto advanced age, eliminating job opportunities oryounger workers.

Most Americans do not expect a lavish liestyle inretirement, but they do want to live out their golden years

with dignity and nancial independence. We need aretirement system that gives them the opportunity to do that

We dont make enough tosave and have no pensioncoming Retirement issupposed to be a time when

you cherish your amily For me,retirement will be the time to pick up asecond, low-paying career.

eresa Law

I have paid into SocialSecurity. Tats one

benet to look at downthe road. But in todayseconomy Social Security is not

going to be enough.David Muse


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PRINCIPLES FOR REFORMOver the past two years, the Senate Committee on Health, Education, Labor and Pensions

has held a series o hearings on the retirement system.18 Te hearings have taken a hard lookat key aspects o the retirement system, and they have provided a clear picture o the kinds ochanges we need to ensure the system can work or everyone. Tose changes can be boileddown into the ollowing our basic principles:

1. The retirement system should be universal and automatic.

Most people realize that they should be preparing or retirement, but it is oten dicultbecause they have more immediate concerns, like paying the bills and putting ood onthe table. And people are requently overwhelmed by the complexity o the nancialdecisions they have to make.19 However, when saving is easy and automatic, people are

much more likely to put money aside.20

By ensuring that every American has accessto a retirement plan at work and making participation automatic, we can drasticallyreduce the retirement income decit and promote retirement security.

2. The retirement system should give people certainty.

Te retirement system should give people certainty that they will have a reliable sourceo income in retirement. It needs to provide people with the opportunity not just tosave or retirement but also to secure a predictable stream o retirement income thatthey cannot outlive.

3. Retirement is a shared responsibility.

Individuals, employers, and the government all have a role to play in ensuring thatevery American has the opportunity to retire with dignity and nancial independence.It is unair or any one party to shoulder the burden alone.

4. Retirement assets should be pooled and professionally managed.

Te retirement system should not orce people to become investment experts. Mostpeople simply do not have the background, interest, or time to manage their retirementunds eectively. Instead, it should give everyone access to prudent, proessional assetmanagement and allow people to pool their assets with others to reduce costs and risk,including the risk o living longer than expected.

Tese our principles should orm the ramework or developing comprehensive solutionsto the retirement crisis. With a retirement income decit o $6.6 trillion, the crisis is simplytoo big to ignore. We cannot continue to stand idly by as average Americans struggle to saveor retirement and our seniors continue to slip into poverty.


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Tis section lays out a two-part plan to solve theretirement crisis by making some bold changes to theprivate retirement system and Social Security. Te rst

proposal would rebuild the private pension system byproviding universal access to Universal, Secure, andAdaptable (USA) Retirement Funds, a new type o privatepension plan that would give people the opportunity toearn a secure benet and would be easy or employers tooer. Te second proposal will improve Social Securityby increasing benets while strengthening the long-termnances o the trust und. ogether, those two reormswould go a long way toward rebuilding the three-leggedstool o retirement security and helping people retire withdignity and nancial independence.

Part One

Rebuilding Pensions

A strong and vibrantpension system is a corecomponent o a secureretirement. However, thepension system has beenin decline or decades, andbusinesses are reluctant

to provide new pensionbenets to their employees.Existing pension modelsare simply not attractive tomany employers. It is timeor a new approach USARetirement Funds.

USA Retirement Funds are innovative, privately-run,hybrid pension plans that incorporate many o the benetso traditional pensions while substantially reducing the

burden on employers. Under this proposal, there wouldbe universal access to USA Retirement Funds throughthe existing payroll withholding systems or those thatdo not already have access to a retirement plan, andanyone participating would have the opportunity to earna cost-eective and portable source o retirement income.USA Retirement Funds would have proessional assetmanagement and give people an easy way to pool their risk

with other active employees and retirees. Importantly, USARetirement Funds would also allow employers to oer asecure retirement benet without taking on management

responsibility or nancial risk. Tat is especially importanor small businesses, which oten do not have the resourcesto manage a retirement plan.

Proessional Management

USA Retirement Funds would be privately-run, licensedand regulated retirement plans. Each USA Retirement Fund

would be overseen by a board o trustees consisting oqualied employee, retiree, and employer representativesTe trustees would act as duciaries and be required toact prudently and in the best interests o plan participants

and beneciaries. Te assets held by each USA RetirementFund would be pooled and proessionally managed.

Lietime Income Benef

People participating ina USA Retirement Fund

would earn a benet paidout over the course o theirretirement, with survivorbenets, like a pensionTe amount o a persons

monthly beneit wouldbe determined basedon the total amount ocontributions made by, oron behal o, the participantand investment perormanceover time. Because it is

nearly impossible or low-wage workers to save enough oretirement, they would be eligible or reundable retirementsavings credits that would be contributed directly to a USARetirement Fund.

Risk Sharing

Pension plans have traditionally placed all o the riskprimarily investment and longevity risk, on employersTose risks have discouraged employers rom oering apension. USA Retirement Funds would make oering apension benet more attractive by eliminating virtually alrisk to employers. Instead, USA Retirement Funds wouldspread the risks inherent in running a pension across large

SOLUTIONS

Risk sharing and proessionalmoney management help make USARetirement Funds an efcient and

secure way to prepare or retirement.David Madland

Center or American Progress


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groups o employees and retirees. Tat kind o broad riskpooling would provide signicant protection to individualsand would reduce overall costs.

Te risk sharing component o the USA RetirementFunds would mean that benet levels are responsive to long-term market conditions. For example, USA RetirementFunds would be conservatively managed, but i there were

a severe and long-term economic downturn, the trusteescould, under specied procedures, gradually adjust benetsto refect market realities while still providing a steadyincome stream to retirees. Conversely, i a USA RetirementFund had better-than-expected returns, those returns

would be conservatively allocated as increased benetsor employees and retirees. Tis type o risk sharing isbenecial to participants and gives them an opportunityto earn a cost-eective source o retirement income.

Universal Coverage

USA Retirement Fundswould ensure that everyworking person in Americahas access to a retirementplan through an automaticpayrol l deduct ion. 21Employers that do not ofera workplace retirement planwith automatic enrollmentand a minimum level oemployer contributions

would have to automaticallywithhold a portion o theiremployees pay and sendsuch amounts to a USA Retirement Fund. Te employercould either choose a USA Retirement Fund or simplyuse the deault und identied or the region, industry,or through collective bargaining. Employees would beautomatically enrolled in the USA Retirement Fund at aspecied contribution level, but they could increase theircontributions, decrease their contributions, or opt out o

automatic enrollment at any time. Enrolling employeesin a USA Retirement Fund would utilize existing payrollwithholding systems, so it would involve little, i any,additional administrative burden, and employers wouldreceive a credit to help o-set the cost. Importantly,employers that already have pension plans or DC Planswith automatic enrollment and a match would not haveto change anything.

Employer Responsibility

Because USA Retirement Funds would be licensed andoverseen by a board o trustees, employers would not haveany duciary responsibilities in selecting, administering, ormanagingthe unds. Employers only obligation with regardto the USA Retirement Funds would be to automaticallyenroll employees, ensure that employee contributions areprocessed, and make modest contributions. Importantlyemployers would not guarantee the USA RetirementFunds or have any residual responsibility to provideadditional unding or make up shortalls.

Encouraging Competition

Competition among USA Retirement Funds will keepcosts low and ensure optimal perormance. o acilitatecompetition, USA Retirement Funds would be subject

to stringent transparencyrequirements and would

be required to regularlyprovide inormation oninvestment perormanceunding levels, andthe projected level oretirement benets basedon contribution levelsBenets would also beentirely portable sothat participants couldmove rom one USA

Retirement Fund toanother.

Coordination with Other Retirement Plans

Tere are many people or whom the current systemis working, and it is important that systemic reormsnot compromise their retirement security. Tus, USARetirement Funds are not intended to replace existingpensions. Many employers and employees have developedexcellent pension arrangements that benet everyone

involved, and those arrangements should be allowed tocontinue to fourish. Additionally, individual retirementsavings are a critical component o retirement security, soUSA Retirement Funds are intended to supplement, notsupplant, DC Plans. Employers could certainly ofer both aUSA Retirement Fund and a DC Plan or their employees

Te USA Retirement Funds andcomprehensive Social Security proposalsare bold, innovative initiatives that willhelp lead our nation toward the sae andsufcient retirement income system thatworking Americans need and deserve.

Karen W. Ferguson

Director, Pension Rights Center


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Part Two

Strengthening Social Security

Social Security has proven to be an incredibly ecientmeans o delivering retirement security to millions oAmericans. Tereore, one o the most eective ways toaddress the retirement crisis and reduce the retirementincome decit is to improve Social Security by enhancing

benets in a scally responsible way. Te Rebuild AmericaAct (the Act), introduced in March 2012, contains acomprehensive plan to improve Social Security.22 Tat plan

would improve benets to help reduce the retirement incomedecit, ensure the cost o living adjustment (COLA)better corresponds to the typical expenses or seniors,and improve the long-termnancial condition o thetrust und by graduallyliting the cap on wagessubject to payroll taxes.

Improved Benets

o improve benets orcurrent and uture SocialSecurity beneciaries, theAct changes the method bywhich the Social SecurityAdministration calculatesSocial Security beneits.Social Security beneitsare based on a progressiveormula that replaces a set percentage o income called a replacement actor at three dierent incomelevels. Te replacement actor or a persons rst $767o Average Indexed Monthly Earnings (AIME) is 90%.Te replacement actor drops to 32% or AIME between$767 and $4,624 and 15% or AIME between $4,624and $8,532.

Te Act improves Social Security benets by expandingby 15% over a 10 year period the amount o earningscovered under the rst replacement actor. In other words,it would increase the amount o AIME that receives the90% replacement rate. Tat change will boost benetsor most beneciaries by approximately $60 a month.Although the increase is modest, it will have an especially

proound efect or those in the middle and at the bottomo the income distribution or whom Social Security hasbecome an ever greater share o their retirement income.

Improved COLA

he Act changes the way the Social SecurityAdministration calculates the COLA so that it moreaccurately refects the change in seniors cost o living

Currently, the annual adjustment is tied to the ConsumePrice Index or all Urban Wage Earners (CPI-W) orthe purposes o calculating infation. Te CPI-W is basedon a basket o goods that does not adequately track thepurchases o seniors such as medical care. Te Act movesrom using the CPI-W to the Consumer Price Index or the

Elderly (CPI-E), an indexthat is specically tailoredto more closely track costsor seniors. Making thischange ensures that SociaSecurity benets keep pace

with the ris ing costs oessential items or seniorsincluding health care.

Improved Financing

Social Security is not incrisis, but it does ace a long-term decit. Accordingto the most recent Social

Security rustees report, thetrust und will be able to pay ull benets through 2033.2

In order to improve benets and improve the solvency othe trust und, the Act would phase out the cap on wagessubject to the payroll tax, which is currently $110,100In other words, income above $110,100 would be subjectto the payroll tax, bringing more revenue into the SociaSecurity system. Te change would be phased in overa 10 year period to minimize the burden on employersand employees. Moreover, to ensure that people receive abenet or every dollar they pay into the system, the Act

creates a new replacement actor o 5% or income overthe current wage cap. ogether with the benet increasesin the Act, these steps will signicantly extend the lie othe rust Fund.24

By expanding Social Security benets

and improving the long-term solvency othe program, the Rebuild America Actdemonstrates a renewed commitment toseniors and hard-working Americans inthese turbulent times.

Social Security Works


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We are acing a retirement crisis, and at $6.6 trillion, it is simply too big to ignore. Tis report providesconcrete solutions to the retirement crisis. Tey are intended to be a starting place in an evolving discussion,and over the coming months, the discussion will continue on Capitol Hill, in Iowa, and across the country.

Public input on this issue is critically important, so people with ideas or stories they want to share cancontact Chairman Harkin by:

Sending emails to: [email protected]

Sending letters to: Retirement Security ProjectSenate Committee on Health, Education, Labor, and Pensions428 Senate Dirksen Oce BuildingWashington, DC 20510

CONCLUSION

(Endnotes)

1. Allianz, Reclaiming the Future, pg.4 (2010), available athttp://www.retirement-

madesimpler.org/Library/EN-991.pd (nationwide survey o 3,257 adults

aged 44-75).

2. Employee Benet Research Institute, Retirement Condence Survey(2012),

available athttp://www.ebri.org/surveys/rcs/2012/; Employee Benet Research

Institute, Te EBRI Retirement Readiness Rating(2010), available athttp://

www.ebri.org/pd/briespd/EBRI_IB_07-2010_No344_RRR_RSPM1.pd.

3. Retirement USA, Te Retirement Income Decit(2011), available athttp://

www.retirement-usa.org/retirement-income-decit-0. Te Employee Benet

Research Institute has also prepared an aggregate retirement income decit

number, taking into account current Social Security retirement benets and

the assumption that net housing equity is utilized as needed. Tat study

estimates that the number is currently $4.3 trillion or all Baby Boomers andGen Xers. Employee Benet Research Institute, Notes Vol. 33, No. 5(2012),

available athttp://www.ebri.org/pd/notespd/EBRI_Notes_05_May-12.

RSPM-ER.Cvg1.pd.

4. Employee Benet Research Institute, Retirement Condence Survey(2012).

5. Id.

6. ransamerica Center or Retirement Studies, 13th Annual ransamerica Worker

Survey(2012), available athttp://www.transamericacenter.org/resources/

tc_center_research.html.

7. Aon Hewitt,2012 Hot opics in Retirement, pg. 5 (2012), available athttp://

www.aon.com/attachments/human-capital-consulting/2012_Hot_opics_in_

Retirement_highlights.pd.

8. Bureau o Labor Statistics, Program Perspectives: On Dened-Benet Plans, Vol.

2, Issue 3 (2010), available athttp://www.bls.gov/opub/perspectives/program_

perspectives_vol2_issue3.pd.9. National Institute on Retirement Security, Te Pension Factor 2012(2012).

10. See generallyU.S. Senate Committee on Health, Education, Labor, and Pen-

sions, Te Power o Pensions: Building a Strong Middle Class and Strong Economy,

112th Cong. (July 12, 2011), available athttp://help.senate.gov/hearings.

11. Id. (Statement o David Marchick, Te Carlyle Group).

12. Senator om Harkin, Saving the American Dream: Te Past, Present, and Uncer-

tain Future o Americas Middle Class(2011), available athttp://harkin.senate.

gov/documents/pd/4e5a7042533.pd.

13. Annamaria Lusardi, Daniel J. Schneider and Peter uano, Financially Fragile

Households: Evidence and Implications, NBER Working Paper No. 17072

(2011), availableathttp://papers.nber.org/papers/w17072.

14. Reich, Robert B., Statement to the U.S. Senate Committee on Health, Educa-

tion, Labor, and Pensions, Te Endangered Middle Class: Is the American Dream

Slipping out o reach o American Families?, 112th Cong. (May 12, 2011), avail-

able athttp://www.help.senate.gov/imo/media/doc/Reich.pd.

15. Employee Benet Research Institute, Retirement Condence Survey(2012).

16. Social Security Administration, Understanding the Benets, SSA Publication

No. 05-10024 (2012), available athttp://www.ssa.gov/pubs/10024.html#a0=0

Government Accountability Oce, Retirement Income: Ensuring Income

Troughout Retirement Requires Difcult Choices, pg.9 (2011), available at

http://www.gao.gov/new.items/d11400.pd.

17. Department o Health and Human Services,A Prole o Older Americans

(2011), available athttp://www.aoa.gov/aoaroot/aging_statistics/Prole/2011/

docs/2011prole.pd.18. Recordings o all o the hearings along with written witness testimony are

available at http://help.senate.gov/hearings.

19. Agnew, Julie, Statement to the U.S. Senate Committee on Health, Education,

Labor, and Pensions, Simpliying Security: Encouraging Better Retirement Deci-

sions, 112th Cong. (Feb. 3, 2011), available athttp://www.help.senate.gov/imo/

media/doc/Agnew.pd

20. Lucas, Lori, Statement to the U.S. Senate Committee on Health, Education,

Labor, and Pensions, Simplifying Security: Encouraging Better Retirement

Decisions, 112th Cong. (Feb. 3, 2011), available athttp://www.help.senate.

gov/imo/media/doc/Lucas.pdf.

21. This feature of the proposal is similar to the administrations proposal to

establish automatic workplace pensions. See Ofce of Management and

Budget,Fiscal Year 2013 Budget of the U.S. Government,pg. 147 (2012),

available athttp://www.whitehouse.gov/sites/default/les/omb/budget/fy2013/assets/budget.pdf

22. Rebuild America Act, S.2252 (March 29, 2012); H.R. 5727 (May 10, 2012)

23. Social Security Administration, 2012 OASDI Trustees Report(2012), avail-

able athttp://www.ssa.gov/oact/tr/2012/index.html.

24. Stephen C. Gross, Chief Actuary of the Social Security Administration, Let-

ter to Senator Harkin (2012), available athttp://www.ssa.gov/oact/solvency

THarkin_20120329.pdf

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