FOR IMMEDIATE RELEASE:
February 15, 2005

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

Congressional Leaders Call for Expansion of
Retirement Security Debate

Legislation Introduced Aims to Help Address Need for Management of Retirement Savings

Washington, DC – 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 – applauded a group of bipartisan Congressional leaders today for recognizing that any debate on retirement security must include a conversation about not only savings accumulation, but also management of savings so they last a lifetime.

The Retirement Security for Life Act, which was introduced Tuesday in both the House and the Senate, is designed to help Americans maintain their standard of living and empower them to receive a steady “paycheck” for life. The legislation provides a tax incentive -- that would be available to any retiree -- to encourage investment of some of their individual after-tax savings in retirement vehicles like annuities that provide a guaranteed lifetime income. Under the proposal, individuals would not pay federal taxes on one-half of the income (up to a maximum of $20,000 annually) generated by annuities that make lifetime payments. For a typical American in the 25% tax bracket, this would provide an annual tax savings of up to $5,000.

According to the bill’s sponsors, including Senators Gordon Smith (R-OR), Kent Conrad (D-ND), Olympia Snowe (R-ME), Hillary Rodham Clinton (D-NY) and Representatives Nancy Johnson (R-CT), John Tanner (D-TN), Phil English (R-PA) and Stephanie Tubbs Jones (D-OH), this is expected to be one of the truly bipartisan solutions that Congress will be considering as they look for common ground on retirement security issues.

“The Members behind the Retirement Security for Life Act are to be commended for recognizing that a true debate about retirement security must go beyond Social Security and savings accumulation,” said Elisabeth Gehl, director of public policy for Business and Professional Women/USA.  “How people are going to manage their savings so they last is increasingly concerning for a vast number of Americans, especially women because they live longer and have less access to traditional pensions.”

“This is a basic ‘kitchen table’ issue,” said David Senter, legislative director for the American Corn Growers Association. “Social Security covers less and less of people’s income needs in retirement. On top of that, thousands of American farmers and their families don’t participate in pension plans or have other means of guaranteeing retirement income. As a result, it is critical that Congress help arm Americans with the tools they need to better manage their individual retirement savings.”

To ensure policymakers see the broad, bi-partisan support this issue enjoys, Americans for Secure Retirement launched a new online petition today at www.paycheckforlife.org. The petition is designed to demonstrate the widespread concern Americans have regarding retirement security and encourage passage of the Retirement Security for Life Act.

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

• Americans are living longer. About half of all retirees will live beyond average life expectancy and one of three 65-year-old women today is expected to live into her 90s.
• 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.

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. For example, according to Census Bureau data, about 60 percent of workers with household incomes of less than $50,000 lack pension coverage.

The Retirement Security for Life Act, which was first introduced last year, has already garnered significant support on both sides of the aisle. Sponsors include: Reps. Rob Andrews (D-NJ), Eric Cantor (R-VA), Melissa Hart (R-PA), Sam Johnson (R-TX), Michael McNulty (D-NY), Jim Ramstad (R-MN), and Ron Paul (R-TX).

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. The coalition members include not only industry, but also 26 groups representing a wide array of interests from women’s groups to Hispanic organizations, farming groups to consumer groups. 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.

For more information on Americans for Secure Retirement or to sign their online petition, visit www.paycheckforlife.org.

###