Congress and the Trump Administration are just about to take away the possibility to save money for retirement for 55 million workers.
The number represents low-income people working jobs that do not offer a retirement fund.
This action eliminates a valuable resource that helped people prepare for the growing crisis that will plague coming generations who are unable to save now through wage deductions, beyond the limited Social Security.
In light of this situation, former President Obama signed an order allowing states and cities to establish pension funds for private sector workers whose employers did not provide retirement plans.
To make it happen, he eliminated a previous requirement for public pensions to comply with the ERISA law, which sets minimum standards for pension funds in the private industry. That way, oversight would be the responsibility of municipalities and states instead of the Department of Labor’s, as was the case with ERISA.
Annulling the order, which was partly voted on yesterday in the Senate – the House of Representatives has already voted on its two parts – is a gift to Wall Street, where it was seen as competition for the private plans they manage.
The official excuse for striking down the order is that this is supposed to defend the savings of workers, as the new fund does not comply with ERISA’s requirements. The financial sector’s concern for the safety of consumers is ironic coming from an industry that lost a great deal of retirement money through irresponsible speculation.
Seven states are on their way to creating these special funds. California, one of the most advanced, established that savings will now be invested in Treasury bonds. The money could not be in a safer place.
More than 56% of the people in the U.S. have no money set aside for retirement. Among women, the figure rises to 62%. An estimated 7 million workers in California and nearly 1.5 million in New York City will suffer the impact of the repeal.
In many cities throughout the country, paying Social Security is not enough to have a decent life. With the threat of new reform, this benefit is also at risk of diminishing. It is essential to help create a private saving system for people working jobs that do not offer them that possibility.
The action carried out by the Republican majority today will signify poverty for dozens of millions of people tomorrow.