What Happened to Federal Retirement Policy?

This afternoon, Senator Tom Harkin (D-Iowa) will convene a hearing to determine the role that pensions play in building a strong and vibrant middle class as well as stimulating the economy and fueling job creation. This, not all that long after the National Commission on Fiscal Responsibility and Reform (Debt Commission) proposed that the limitation on contributions on behalf of an employee to defined contribution plans be limited to the lesser of 20% of pay or $20,000. And, finally, to make it a trifecta, the general consensus among politicians who are opening their mouths is that we need to raise the Social Security Normal Retirement Age (SSNRA), cut back on Social Security Cost of Living Adjustments (COLAs), and increase FICA taxes on current workers.

With the Pension Protection Act (PPA) already having done a better job of gutting (rather than protecting) the private pension system than all legislation before it, how will workers ever manage to retire?

Let's look at some facts and some opinions (I'll let you figure out which are which, but I think it will be pretty obvious).

• Americans are living longer -- much longer
• American companies constantly look for ways to legally discharge older workers
• Periods from retirement until death are longer than they have ever been before
• Median savings (outside of qualified retirement plans) among Americans are at modern lows

And, you know what, while it is a commonly held opinion that workers need to work longer (perhaps the same percentage of the period from, say, age 25 to life expectancy that they always have), many companies look for ways to get rid of those older workers. In fact, under the Age Discrimination in Employment Act (ADEA), the protected class consists of people between the ages of 40 and 69. Turn 70, sayonara! From the worker's standpoint, if you always had it in your mind that you were going to retire at age 65 (how could that happen other than that when you started working, you had all kinds of employer-sponsored and government-sponsored plans that specified a retirement age of 65), then it gets tougher and tougher to work at later ages. Your golden years don't seem so golden. 

Oh, yeah, Congress still has the most lucrative retirement plan of all. They don't place the same limits on their plans that they place on yours and mine. They don't get it.

So, the next lovely plan that comes out will probably have some wonderfully constructed name like the Save our Country's Retirement for Employees and Workers who Really Expected The Ideal Retirement to End Most Every Nice Tale. I know -- it doesn't make sense. But, the acronym seems to -- SCREW RETIREMENT.