UNIVERSAL AND ADEQUATE PENSION COVERAGE FOR WORKERS

WHEREAS, approximately one-half of our nation's 118 million-member public and private workforce does not participate in a pension plan; and

WHEREAS, only about one-half of those who are covered by a pension are vested in a pension benefit and many public employees must wait longer than five years to vest; and

WHEREAS, the lack of a national system of pension portability creates an economic hardship for workers who work regularly but change employers due to economic, social and family-related factors or status; and

WHEREAS, service credit structures in pension plans adversely affect part-time workers because they are often based on an annual minimum number of hours of work, not on the basis of a continuing employment relationship, and cause part-time workers to work an extended time period to qualify for a vested benefit; and

WHEREAS, nurses and other health care workers, special education teachers, teacher aides, bus drivers, and other AFT members are likely to change employers frequently and to be employed on a part-time basis, which places them at a disadvantage in qualifying for pension benefits; and

WHEREAS, the national average pension benefit of about $700 per month replaces only about one-third of final earnings for a typical career employee, and Social Security only replaces about one-third of final earnings, leaving a substantial shortfall in money income needed by retirees to maintain their standard of living; and

WHEREAS, only about one-half of all pension recipients are eligible for a cost-of-living-adjustment (COLA) to their pension; and

WHEREAS, only about one-half of retirees are eligible for employer-financed retiree medical care; and

WHEREAS, the Financial Accounting Standards Board's (FASB) accounting rule changes for postretirement medical benefits will encourage employers to limit or eliminate retiree medical coverage; and

WHEREAS, the age 65 and over population is the fastest-growing demographic group in our society, and their standard of living can and must be protected; and

WHEREAS, total pension assets in private and public funds grew from about $17 billion in 1950 to nearly $2 trillion in 1987 and have become the major source of long-term investment capital for economic development in our nation; and

WHEREAS, universal pension coverage would make huge amounts of investment capital available for long-term economic development and also provide a retirement benefit for all workers:

RESOLVED, that the AFT call for a national system of pension coverage for all workers that is immediately vested, completely portable, and whose assets would be used to enhance economic development; and

RESOLVED, that our nation establish a national retirement income standard that includes the following components:

• retirement income for a career employee that is sufficient to maintain their current standard of living on the date of retirement. Retirement income would be composed of all sources of income, including pensions, annuities and Social Security; and

• annual automatic cost-of-living-adjustments to pensions to maintain and enhance their purchasing power; and

•  full coverage for retiree medical insurance; and

• full coverage for long-term care insurance.