Mandatory Savings Accounts Are Coming Your Way

As the retirement savings crisis deepens, the call for forced savings grows louder. We are headed for something like Australia's "superannuation" model--with the possibility of one big change: employee contributions.

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The retirement savings crisis in America has brought us to this point: It’s a near certainty that mandatory savings accounts are in the future of anyone with a full- or part-time job.

The world’s largest investment firm BlackRock, with $4 trillion under management and a lot of weight to throw around, is the latest to sound the call. “We need a comprehensive solution to retirement savings that includes some form of mandatory retirement savings,” CEO Laurence Fink said this week. He added that his firm has been agitating “quite noisily” for retirement overhaul and that going forward “we’ll be louder as a firm.”

Fink’s call for mandatory savings accounts is in sync with other prominent thinkers in the retirement savings field. Alicia Munnell, director of the Center for Retirement Research at Boston College, is on record favoring these accounts. She says they should be designed to provide 20% of pre-retirement income. Munnell’s colleague at the Center, Julie Agnew, in a study credits mandatory savings accounts in Australia for that country’s “high individual saving rates and broad coverage at reasonably low cost to the government.”

U.S. Senator Tom Harkin, an Iowa Democrat and chairman of the Senate Health, Education, Labor and Pensions Committee, is looking at legislation this year that would make saving for retirement more widely available through a so-called USA Retirement fund, though it would not necessarily be mandatory. Billionaire Peter Peterson floated the idea of mandatory accounts several years ago.

(MOREA New Idea to Fix the Retirement-Savings Crisis)

The Australian system increasingly is being held up as a model for the U.S. In Australia, employers must contribute 9% of pay (rising to 12% in 2020) to every full- or-part-time worker between the ages of 18 and 70. This makes the accounts a little like a traditional pension in that the employer is funding them. But the accounts are owned and managed by individuals, as with a 401(k).

The Australian “superannuation” accounts were put in place just 20 years ago and have all but solved that country’s retirement savings crisis. Fink believes something similar would work in U.S. too. He suggests that employer contributions to these accounts be phased in over time, as they have been in Australia.

It’s not clear if such accounts would replace the 401(k), be made part of the 401(k) or be in addition to the 401(k). It’s also not clear if employees would be required to contribute to them. Fink says individuals might be asked to contribute some part of their income, possibly 3% to 5%, but that any employee requirement would best be contemplated in the context of a total retirement system overhaul. Commenting on the Australian model, Fink said:

“Superannuation has been a huge success in supplementing the government pension scheme and taking the strain off it, an attractive prospect as we think about how to relieve the burden on Social Security in this country. All told, in just 20 years, more than $1.6 trillion in assets are held in these accounts, giving Australians one of the highest per capita retirement savings pools in the world.”

(MOREHow a Few Text Messages a Month Can Secure Your Retirement)

According Senator Harkin:

  • The difference between the amount of savings working-age Americans have accumulated for retirement and the amount they should have already saved is $6.6 trillion.
  • Half of all Americans have less than $10,000 in savings.
  • Just one in five working Americans will receive pension income during retirement.
  • Nearly 6 million Americans over the age of 65 live in poverty, and that number is expected to grow.

In a new survey, BlackRock found that 73% of investors agree that keeping money safe is more important than seeking returns. This level of safety is understandable, given the turmoil that portfolios have endured the last dozen years. But it also speaks to the need for a mandatory savings program, as the relatively few who are saving anything on their own are doing so in ways that are unlikely to produce the nest egg they’ll need later in life.

21 comments
ajain31
ajain31

 http://www.alternet.org/news-amp-politics/50-reasons-you-despised-george-w-bushs-presidency-reminder-day-his-presidential


50 Reasons We Despised George W. Bush's Presidency: A Reminder on the Day of His Presidential Library Dedication

Today President Obama and all four living ex-presidents attend the dedication of the $500 million George W. Bush Presidential Library at Southern Methodist University in Dallas, Texas. Many progressives will remember Bush as a contender for the "worst president ever," saying he more aptly deserves a multi-million-dollar prison cell for a litany of war crimes.

Amazingly, the Bush library seeks to ask visitors "What would you have done?" if you were in this president’s shoes. The ex-president’s defenders are betting that the public will reconsider their judgments after a hefty dose of historical amnesia. Bush has been absent from political debates in recent years, instead making millions in private speeches. Today, his popularity is even with Obama's; both have 47 percent approval rating.

Let’s look at 50 reasons, some large and some small, why George W. BUSH inspired so much anger and hate.

1. Bush stole the presidency in 2000. People may forget that Republicans in Florida purged more than 50,000 African-American voters before Election Day, and then went to the Supreme Court where the GOP-appointed majority stopped a recount that would have awarded the presidency to Vice-President Al Gore if all votes were counted. National news organizations verified that outcome long after Bush had been sworn in.

2. Bush’s lies started in that race. Bush ran for office claiming he was a “uniter, not a divider.” Even though he received fewer popular votes than Gore, he quickly claimed he had the mandate from the American public to push his right-wing agenda.  

3. Bush covered up his past. He was a party boy, the scion of a powerful political family who got away with being a deserter during the Vietnam War. He was reportedly AWOL for over a year from his assigned unit, the Texas Air National Guard, which other military outfits called the "Champagne Division.”

4. Bush loved the death penalty. As Texas governor from 1995-2000, he signed the most execution orders of any governor in U.S. history—152 people, including the mentally ill and women who were domestic abuse victims. He spared one man’s life, a serial killer.

5. Bush was a corporate shill from Day 1. Bush locked up the GOP nomination by raising more campaign money from corporate boardrooms than anyone at that time. He lunched with CEOs who would jet into Austin to "educate" him about their political wish lists.

6. Bush gutted global political progress. He pulled out of the Kyoto Protocol which set requirements for 38 nations to lower greenhouse gas emissions to combat climate change, saying that abiding by the agreement would “harm our economy and hurt our workers.”

7. Bush embraced global isolationism. He withdrew from the 1972 Anti-Ballistic Missile Treaty, over Russia’s protest, taking the U.S. in a direction not seen since World War I. 

8. Bush ignored warnings about Osama bin Laden. He ignored the Aug. 6, 2001 White House intelligence briefing titled, “Bin Laden determined to strike in the U.S.” Meanwhile, his chief anti-terrorism advisor, Richard Clarke, and first Treasury Secretary, Paul O’Neill, testified in Congress that he was intent on invading Iraq within days of becoming president.

9. Bush ramped up war on drugs, not terrorists. The Bush administration had twice as many FBI agents assigned to the war on drugs than fighting terrorism before 9/11, and kept thousands in that role after the terror attacks. 

ajain31
ajain31


30. Iraq war created federal debt crisis. The total costs of the Iraq and Afghan wars will reach between $4 trillion and $6 trillion, when the long-term medical costs are added in for wounded veterans, a March 2013 report by a Harvard researcher has estimated. Earlier reportssaid the wars cost $2 billion a week.

31. He cut veterans’ healthcare funding. At the height of the Iraq war, the White Housecut funding for veterans’ healthcare by several billion dollars, slashed more than one billion from military housing and opposed extending healthcare to National Guard families, even as they were repeatedly tapped for extended and repeat overseas deployments.

32. Then Bush decided to cut income taxes. In 2001 and 2003, a series of bills lowered income tax rates, cutting federal revenues as the cost of the foreign wars escalated. The tax cuts disproportionately benefited the wealthy, with roughly one-quarter going to the top one percent of incomes compared to 8.9% going to the middle 20 percent. The cuts were supposed to expire in 2013, but most are still on the books.

33. Assault on reproductive rights. From the earliest days of his first term, the Bush White House led a prolonged assault on reproductive rights. He cut funds for U.N. family planning programs, barred military bases from offering abortions, put right-wing evangelicals in regulatory positions where they rejected new birth control drugs, and issued regulations making fetuses—but not women—eligible for federal healthcare.

34. Cut Pell Grant loans for poor students. His administration froze Pell Grants for years and tightened eligibility for loans, affecting 1.5 million low-income students. He also eliminatedother federal job training programs that targeted young people.

35. Turned corporations loose on environment. Bush’s environmental record was trulyappalling, starting with abandoning a campaign pledge to tax carbon emissions and then withdrawing from the Kyoto Protocol on greenhouse gases. The Sierra Club lists 300 actions his staff took to undermine federal laws, from cutting enforcement budgets to putting industry lobbyists in charge of agencies to keeping energy policies secret.

36.. Said evolution was a theory—like intelligent design. One of his most inflammatory comments was saying that public schools should teach that evolution is a theory with as much validity as the religious belief in intelligent design, or God’s active hand in creating life.

37. Misguided school reform effort. Bush’s “No Child Left Behind” initiativemade preparation for standardized tests and resulting test scores the top priority in schools, to the dismay of legions of educators who felt that there was more to learning than taking tests.

38. Appointed flank of right-wing judges. Bush’s two Supreme Court picks—Chief Justice John Roberts and Associate Justice Samuel Alito—have reliably sided with pro-business interests and social conservatives. He also elevated U.S. District Court Judge Charles Pickering to an appeals court, despite his known segregationist views.

39. Gutted the DOJ’s voting rights section. Bush’s Justice Department appointees led a multi-year effort to prosecute so-called voter fraud, includingfiring seven U.S. attorneys who did not pursue overtly political cases because of lack of evidence.

Miguel_Hempy
Miguel_Hempy

If they keep raping us with inflation the savings is almost worthless


JohnCheek
JohnCheek

What the Hell do you call Social Security other than a "Mandatory Savings Account"? Even though the Govn't has stolen all of it and used it for their own.

Knox
Knox

Fink is a moron!  We already make "voluntary" contributions to Social Security.  Does anyone really believe we need another mandatory system on top of the already broken system in place?  As I said, MORON!

Cmcapos
Cmcapos

This has to be the dumbest idea governmet cronies have come up with yet. Just what I want, another government managed retirement plan. Isn't social security supposed to take care of you for retirement? Leave me and my money alone, I'll take risk and do it on my own, without any help from Uncle Sam.

ajain31
ajain31

There is a BIG difference between BUSH & OBAMA! There is a lot to hate BUSH for because he took the nation to the brink of chaos and destruction with TWO wars and TWO tax cuts simultaneously! No one in our nation's history had done that before BUSH ever! That is why we had the biggest Financial MELTDOWN in history under BUSH!! Obama is only trying to restore the country to normalcy from BUSH disasters of historic proportions and if history is any guide BUSH and OBAMA will not sit in the same category of Presidents ever. Mark my words and check back in 2020 or 2024 or sooner as political developments on the world stage will demonstrate sooner than that.

okayfine
okayfine

It might work in Australia & that's great news. Here, though, I can't imagine there not being a HUGE uproar from businesses objecting to having to pay into an acct for what they consider to be "disposable", PT employees. I happen to have a PT job with a 403(b), which I find astounding, as does my HR rep. (She's proud, but astounded that she was able to push it through.) I would love to see it happen, but I don't see American businesspeople agreeing to it. Where I live, it's extremely difficult to find a FT job, just because no one wants to pay basic benefits. They list "PT" jobs that require 31 hrs. Slick. Very proud of themselves.

VerbalKarate
VerbalKarate

We have mandatory retirement accounts. It's called "Social Security". Except, almost no one on it is very financially secure. Keep thinking...

congressive
congressive

"Billionaire Peter Peterson floated the idea of mandatory accounts several years ago."  I'll be he did.  What does he give a rat's arse about Social Security for?  Oh, yeah. The word "plunder" comes to mind...

 Oh my God - could they be anymore blatant?!?!? Hey, I know, how about a 90% tax on all profits over $1 billion and put it straight to SS.  That'd fix it.  What's wrong with THAT? What?  That's not fair?  Cry babies.

ajain31
ajain31

50 Reasons You Despised George W. Bush's Presidency

Today President Obama and all four living ex-presidents attend the dedication of the $500 million George W. Bush Presidential Library at Southern Methodist University in Dallas, Texas. Many progressives will remember Bush as a contender for the "worst president ever," saying he more aptly deserves a multi-million-dollar prison cell for a litany of war crimes.

Amazingly, the Bush library seeks to ask visitors "What would you have done?" if you were in this president’s shoes. The ex-president’s defenders are betting that the public will reconsider their judgments after a hefty dose of historical amnesia. Bush has been absent from political debates in recent years, instead making millions in private speeches. Today, his popularity is even with Obama's; both have 47 percent approval rating.

Let’s look at 50 reasons, some large and some small, why W. inspired so much anger.

1. He stole the presidency in 2000. People may forget that Republicans in Florida purged more than 50,000 African-American voters before Election Day, and then went to the Supreme Court where the GOP-appointed majority stopped a recount that would have awarded the presidency to Vice-President Al Gore if all votes were counted. National news organizations verified that outcome long after Bush had been sworn in.

2. Bush’s lies started in that race. Bush ran for office claiming he was a “uniter, not a divider.” Even though he received fewer popular votes than Gore, he quickly claimed he had the mandate from the American public to push his right-wing agenda.

3. He covered up his past. He was a party boy, the scion of a powerful political family who got away with being a deserter during the Vietnam War. He was reportedly AWOL for over a year from his assigned unit, the Texas Air National Guard, which other military outfits called the "Champagne Division.”

4. He loved the death penalty. As Texas governor from 1995-2000, he signedthe most execution orders of any governor in U.S. history—152 people, including the mentally ill and women who were domestic abuse victims. He spared one man’s life, a serial killer.

5. He was a corporate shill from Day 1. Bush locked up the GOP nomination by raising more campaign money from corporate boardrooms than anyone at that time. He lunched with CEOs who would jet into Austin to "educate" him about their political wish lists.

6. He gutted global political progress. He pulled out of the Kyoto Protocol which set requirements for 38 nations to lower greenhouse gas emissions to combat climate change,saying that abiding by the agreement would “harm our economy and hurt our workers.”

7. He embraced global isolationism. He withdrew from the 1972 Anti-Ballistic Missile Treaty, over Russia’s protest, taking the U.S. in a direction not seen since World War I.

8. He ignored warnings about Osama bin Laden. He ignored the Aug. 6, 2001 White House intelligence briefing titled, “Bin Laden determined to strike in the U.S.” Meanwhile, his chief anti-terrorism advisor, Richard Clarke, and first Treasury Secretary, Paul O’Neill, testifiedin Congress that he was intent on invading Iraq within days of becoming president.

9. Ramped up war on drugs, not terrorists. The Bush administration had twice as many FBI agents assigned to the war on drugs than fighting terrorism before 9/11, and kept thousands in that role after the terror attacks.

alvarez.t3
alvarez.t3

Another social security scam in the making , please Fuc& Off .

GMoney
GMoney

We complain about mandatory health insurance, but not so much as a peep about this one.

bryanfred1
bryanfred1

Is the proposal that these accounts eventually replace Social Security entirely?  Social Security returns effectively 0% on the money paid into it - it comes in and immediately goes out.  Putting that money into some sort of appreciating asset, if only low-risk varieties, would take a tremendous amount of pressure off the system.  Next step:  Democrats screaming "PRIVITAZATION!" and any potential progress grinds to a halt.  Status quo maintained.

Cmcapos
Cmcapos

Do you ever get tired of playing democrats good republicans bad?

cyber_nicco
cyber_nicco

@GMoney Well, for one thing, this one doesn't exist.  It's just an idea some people have - mostly investment companies and their shills who want to force people to use their services so they can reap the rewards.

hivemaster
hivemaster

@bryanfred1 You're forgetting ALL about 2007, aren't you.  Had SS been privatized, it would be broke now.

ajain31
ajain31

@Cmcapos NEVER!!

Hello Friends,

Governor Rick Perry millions of under-privileged poor Texans who do not have any Health Coverage will be covered under The Affordable Care ACT (ACA) expansion of MEDICAID! 

My Physician wife's practice is partly dependent on MEDICAID and its viability. Please allow the expansion of MEDICAID to occur in Texas under The Affordable Care ACT. 

Believe it or not IT IS A FACT: If states choose to expand Medicaid, the federal government will cover 100 percent of the costs from 2014 to 2016. The feds' contribution will begin to decrease in 2017, but will never be less than 90 percent, under the ACA.

That's why I created a petition to Governor Rick Perry, Texas Governor, The Texas State House, The Texas State Senate, and Governor Rick Perry, which says:

"Please ACCEPT the FREE EXPANSION of MEDICAID under The Affordable Care ACT."

Will you sign this petition? Click here:
http://signon.org/sign/accept-free-expansion?source=c.em.cp&r_by=7268737

Thanks!

Ajay Jain
ajain31@gmail.com
Twitter Handle @ajain31.
Mobile: 214-207-9781

cyber_nicco
cyber_nicco

@mhungerman @bryanfred1 The stock market is higher than ever before in history - it broke 15,000 just a few days ago.  People only lost money if they sold their stock when the bottom fell out.  In fact, the last few years have brought some of the greatest gains in history.  Just have to know to buy low and sell high.