FOR IMMEDIATE RELEASE
December 7, 2004

CONTACT:
Juan Cortinas, 202.777.3519
Tammy Gordon, 202.777.3530
Shannon Hunt, 202.777.3512

Coalition Applauds Senate Leadership on Retirement Security

Bipartisan Proposal is Only Solution that Retirees Can’t Outlive

Washington – Americans for Secure Retirement -- a coalition representing a broad cross-section of interests from women’s groups and rural organizations to consumer advocacy and taxpayer organizations – today commended Senators Gordon Smith (R-OR) and Kent Conrad (D-ND) for their leadership on retirement security following their introduction of the Retirement Security for Life Act in the United States Senate.

The bill is designed to give Americans more control over their retirement standard of living and empower them to receive a steady income for life. According to the co-sponsors, the bill was introduced in the final days of the 108 th Congress to establish a clear priority for attention by the 109 th Congress. It will be reintroduced again when the new Congress convenes in 2005. A similar bill introduced in the House earlier this year has already garnered significant bipartisan support, particularly from House Ways & Means Committee members.

The Retirement Security for Life Act provides a tax incentive that would encourage retirees to choose retirement vehicles for their individual after-tax savings, such as annuities, that provide a guaranteed lifetime income. Under the proposal, individuals would not pay federal taxes on one-half of the income generated by annuities that make lifetime payments. There would be an annual limit of $20,000 on the amount an individual could exclude from federal taxes each year. For a typical American in the 25% tax bracket, this would provide an annual tax savings of up to $5,000.

Americans for Secure Retirement supports bipartisan efforts to address the looming retirement challenges posed by the large numbers of the nation’s 77 million baby boomers set to begin retiring in the coming years. They support policy changes that would encourage workers and retirees to choose retirement vehicles that cannot be outlived, such as life annuities that make steady payments for life – something the bill would help to address.

“With Social Security and pension reform sure to be a major focus in the next Congress, it is critical that lawmakers address the need for consumers to have better options for better managing their savings. It’s a critical part of the equation that cannot be left out,” said Shannon Hunt, spokesperson for Americans for Secure Retirement. “Annuities are the only retirement vehicle that retirees can not outlive. It especially helps those who don’t have access to employer-based pensions to supplement their Social Security and ensure that they don’t spend their retirement dwindling down their assets when they are most needed.”

“Having enough savings is important, but the hardest part is managing those savings so they’ll still have a decent standard of living when they’re in their 90s or older,” said David Senter, director of legislative affairs for the American Corn Growers Association, a member organization of Americans for Secure Retirement.. “Americans with guaranteed income can live more independent lives and avoid becoming a burden on their families or others. They have peace of mind.”

Americans for Secure Retirement, launched earlier this year with a media and advertising blitz to educate Americans about the emerging retirement crisis and to promote passage of proposals such as this legislation. The Senate bill joins its companion House version (HR 4849), which has been lead by Reps. Nancy Johnson (R-CT), Rep. John Tanner (D-TN) Rep. Phil English (R-PA) and Rep. Stephanie Tubbs Jones.

Current co-sponsors in the House of Representatives include Robert Andrews (D-NJ), Dave Camp (R-MI), Eric Cantor (R-VA), Mark Foley (R-FL), Bob Goodlatte (R-VA), Bart Gordon (D-TN), William Jefferson (D-LA), Sam Johnson (R-TX), John Larson (D-CT), Ron Lewis (R-KY), Michael McNulty (D-NY), Ron Paul (R-TX), Jim Ramstad (R-MN), Max Sandlin (D-TX) and Rob Simmons (R-CT).

Several significant economic and demographic shifts are putting the retirement security of most Americans at risk. These shifts include:

• Americans are living longer. Life expectancy of a 65-year-old is close to age 83, four years longer than in 1960. One of three 65-year-old women today is expected to live into her 90s. About half of all retirees will live beyond average life expectancy.
• The coming retirement of the nation’s 77 million baby boomers will double the number of retirees in the Social Security program.
• Fewer retirees in the future will enjoy the security and regularity of monthly pension checks that many employers once paid. Thirty years ago, 40 percent of workers had traditional pensions; that portion today is 21 percent and dropping.

Groups who traditionally have not had access to adequate pension coverage are especially at risk. They include women, farmers, the self-employed, part-time workers, employees of small firms and minorities, many of whom are middle-income. According to Census Bureau data, about 60 percent of workers with household incomes of less than $50,000 lack pension coverage.

Members of the coalition include a growing list of diverse organizations, including the following: American Agriculture Movement of Arkansas, American Agri-Women, American Corn Growers Association, American Council of Life Insurers, Business and Professional Women/USA, Citizens Against Government Waste, Committee of Annuity Insurers, Financial Services Roundtable, Hispanic Business Roundtable, National Association for Variable Annuities, National Association of Farmer Elected Committees , National Community Pharmacists Association, National Consumers League, National Taxpayers Union, Small Business Survival Committee, Soybean Producers of America, The Latino Coalition, U.S. Chamber of Commerce, Women Entrepreneurs, Inc., Women Impacting Public Policy, Women’s Institute for a Secure Retirement, Women in Farm Economics and Women Presidents’ Organization.

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