Ensuring Retirement Security and Strengthening Social Security

Kennedy Introduced Legislation to Protect Pensions In 2002, Senator Kennedy introduced legislation offering workers real investment options and protections for retirement savings. In addition, the bill sought to hold executives accountable if they mislead workers regarding their pensions. Senator Kennedy’s bill included four important provisions to protect American’s retirement security. It would have: 1) prevented employers from overloading plans with company stock; 2) provided workers a choice in investment options by allowing them a voice on the boards of pension plans; 3) ensured that employees receive high-quality, independent investment advice regarding their plans, including notification of executive stock sales; and 4) enabled workers to hold top executives accountable for abusing pension plans.

• Kennedy Offered an Amendment Providing Worker Restitution for Lost Pensions< During consideration of the corporate accountability bill, Senator Kennedy introduced an amendment to hold executives accountable for misleading workers about their pensions. Senator Kennedy’s amendment would have applied appropriate penalties to corporate executives who give workers misleading information about the company stock in 401(k) plans. Americans who work hard all their lives deserve the comfortable retirement they have earned. If they lose this security because of deliberate mismanagement by corporate executives, they deserve the capacity to seek restitution.

• Kennedy Worked to Stabilize Pension Plans In 2004, Senator Kennedy cosponsored legislation to help stabilize existing pension plans ravaged by poor economic conditions. The amendment, introduced as a substitute to the Pension Funding Equity Act, would have temporarily replaced the 30-year Treasury bond rate and provided relief to multiemployer plans. Additional steps are necessary to shore up pensions over the long term and expand defined benefit plans to more workers, but Kennedy’s bipartisan amendment would have offered a short-term solution for plans struggling in the weak economy. Although Kennedy’s proposal passed overwhelmingly in the Senate, and a compromise was worked out with the House, the White House rejected the bill. Instead, legislation that was signed into law denied pension relief for ten million Americans because they belonged to a multiemployer plan instead of a single-employer plan.

• Kennedy Introduced Bipartisan Pension Reform In 2005, Senators Kennedy and Enzi, a Republican from Wyoming, introduced bipartisan pension reform legislation. Senator Kennedy’s bill would require companies to protect their pensions with rules that are fair and predictable, and would safeguard against terminated plans. In addition, the bill would protect pensions that have been earned; ensuring that the savings accumulated over many years is not threatened by changes in a company’s pension system. This is especially critical for older Americans, who have worked all their lives to secure a comfortable retirement, only to see their security at risk after changes were made to their pensions. Kennedy’s bill would ensure that every worker receives the retirement security they have earned. Finally, Senator Kennedy’s bill would provide relief to multiemployer pensions, which cover workers who move from job to job, or work for small businesses that can’t afford to offer retirement plans.

Kennedy Introduced Legislation to Protect Women’s Retirement Security In 2003, Senator Kennedy introduced legislation to protect women’s retirement security. The Women’s Pension Protection Act, incorporated in Kennedy’s comprehensive pension bill, would have provided women greater options related to pension and 401(k) pay-outs. In addition, the bill would have offered more generous survivor benefits to widows, and allowed divorced spouses greater opportunities to obtain a share of their former husband’s pension benefits following divorce. Due to the realities of women’s working lives, many women retire without any form of financial security. Senator Kennedy’s legislation would have provided improvements to adapt the pension system to these realities, and ensure all Americans a stable and certain retirement.

Kennedy Fought to Protect Social Security from Cuts in the Cost of Living Adjustment Social Security is an important source of income for seniors in the United States. Without Social Security, 48 percent of beneficiaries would be living in poverty. To protect benefits against inflation, Social Security beneficiaries receive an annual cost of living adjustment (COLA) based on the Consumer Price Index. The 2003 COLA, announced in January of that year, provided only a 1.4 percent increase in benefits. This adjustment, which increased the average benefit by just $13, was far short of the amount required for seniors to afford higher Medicare premiums and out-of-pocket health care costs. In response to the insignificant 2003 cost of living adjustment, Senator Kennedy cosponsored a resolution expressing the sense of the Senate that the Social Security COLA should not be reduced.