ACHIEVING NATIONAL RETIREMENT SECURITY FOR ALL WORKERS

WHEREAS, America is facing a looming retirement crisis, with many Americans reporting that they have virtually no savings or investments, and the number of seniors living at or below the poverty line is projected to more than double in a decade; and

WHEREAS, while the share of Americans covered by defined-benefit pensions has plummeted over the past few decades, becoming almost obsolete in the private sector, the vast majority of the American Federation of Teachers’ 1.7 million members participate in defined-benefit pension plans, whose assets exceed $3 trillion; and

WHEREAS, defined-benefit pension plans are actually deferred wages for workers who have actively contributed to their fund, paid their fair share and accepted increased employer contributions in lieu of wage increases for the sake of their retirement; and for many teachers, these pensions are their sole source of retirement security because many cannot access Social Security or receive a significantly reduced benefit as a result of GPO/WEP; and

WHEREAS, there are three essential elements that form the foundation of retirement security in America—a defined-benefit pension, Social Security and savings—but today, few Americans are on track to enjoy a secure retirement built upon all three, because most Americans do not have access to a pension; and

WHEREAS, given that the typical family headed by someone ages 55-64 had only $16,000 saved in a retirement account in 2016, and at least half of all Americans will rely mainly on Social Security for most of their retirement income, with an average yearly benefit of only $16,500, it is not surprising that nearly two-thirds of Americans fear running out of money in retirement more than they fear death; and

WHEREAS, 55 million working Americans have no options to set money aside for retirement through an employer-sponsored retirement plan, and more than half of U.S. businesses do not offer a plan; and

WHEREAS, polling indicates that retirement security has been the No. 1 economic issue for Americans and voters for the last 17 years; and

WHEREAS, teacher actions in Colorado and Kentucky were fueled in part by proposed reductions to teacher pensions, and teacher strikes across the nation lay bare the deep economic insecurity of millions of teachers as well as their dire financial challenges in saving for retirement; and

WHEREAS, lacking a near-term federal solution to the retirement security crisis, 40 states have introduced legislation and nine states have enacted laws designed to improve retirement security by expanding access to retirement savings plans, the development of which the AFT resolved in 2015 to support; and

WHEREAS, while these innovative state plans represent real progress and will improve retirement savings, they will not adequately address the crisis because of various limitations, including legal limitations imposed on state-based plans, which could be remedied through a federal solution; and

WHEREAS, the National Retirement Security Project and its proposal for guaranteed retirement accounts (GRA) offers a clear road map to achieving greater security in retirement for millions of Americans, creating a national plan offering access to pooled, professionally managed, portable, individually owned retirement accounts for workers, funded by automatic contributions from both employers and employees, with participation available to all workers, including those in alternative work arrangements; and

WHEREAS, for workers covered by pensions, the AFT defends and advocates for defined-benefit pension plans as the preferred standard for retirement security, and pushes to ensure that adequate funds are contributed to meet benefits now and into the future; and

WHEREAS, guaranteed retirement accounts will be available to all workers, and, for those lacking a pension, a GRA may function as that third essential element of retirement security, along with savings and Social Security; and

WHEREAS, low investment and administrative fees are essential to ensuring that the value of retirement savings remains with the account holder, and transparent, responsible oversight and governance through a representative board of trustees are critical to the viability and accountability of the program to plan participants; and

WHEREAS, a poll of 3,000 voters funded by the AFT demonstrated that more than 70 percent of Americans support the creation of a guaranteed retirement account:

RESOLVED, that the American Federation of Teachers will continue to support efforts at the state and national levels to improve and strengthen the federal Social Security program; and

RESOLVED, that the AFT will continue to fight to ensure that the retirement security promises made to educators and other public employees are kept by maintaining full funding for defined-benefit pension plans because these plans are  deferred wages, and represent many workers’ sole retirement savings, since educators are frequently exempt from Social Security; and

RESOLVED, that the AFT will support the National Retirement Security Project and its goals to educate the public about guaranteed retirement accounts as a means to achieve improved retirement security for millions of American workers; and

RESOLVED, that the AFT will continue to support state efforts to enact state-based supplemental retirement plans in order to extend retirement savings opportunities to private sector employees who currently lack access to low-cost, professionally managed retirement plans overseen by a board of trustees; and

RESOLVED, that all workers must have a guaranteed retirement income for life that allows them as well as their spouses or partners to maintain their standard of living after a lifetime of work, and that prevents all Americans from falling into poverty as they age; and

RESOLVED, that the AFT reaffirms its support for retirement security for all, including the three essential elements—a defined-benefit pension, Social Security and savings—based on shared risk and shared responsibility among employers, employees and government, and reaffirms its support for empowering plan trustees to implement responsible investment and funding policies.