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Retirement Security
Recent trends in engineering employment, which have resulted in frequent job changes, periodic unemployment, and increasing reliance on part-time, temporary, and contract employment, have affected engineers' professional careers and their retirement security. In addition, the retirement income system, generally portrayed as a triad consisting of Social Security, employer-provider retirement plans, and personal savings, has been experiencing fundamental changes in recent years. The long-term solvency of Social Security is threatened; many employers are switching from traditional pensions to 401(k) plans; the distinction between employer-provided retirement plans and personal savings is blurring; and work after retirement is becoming an important source of retirement income. A particularly disturbing trend is the tendency of Congress and the federal executive branch to make significant changes to retirement income policy on the basis of short-term revenue considerations rather than the long-term security of the American worker.
AAES recognizes the importance of improving opportunities for all workers to remain economically secure at the conclusion of their working lives. Any effort to improve retirement income policies must consider all of the components of the current retirement income system and must do so in a manner that recognizes changing individual needs and employment relationships. Most importantly, AAES realizes that the most effective retirement income policy the federal government can pursue is a sound economic policy that seeks sustained growth without inflation, which will promote retirement saving and the preservation of assets.
Policy Objectives
- Encourage all individuals to plan and save for retirement
- Strengthen employer-sponsored pension plans by encouraging increased coverage, assuring adequate funding, reducing vesting requirements, guaranteeing portability of vested benefits when workers change jobs, and promoting preservation of retirement accounts solely for use in retirement
- Explore an innovative, tax qualified, and privately run non-employer based pension system that could link employees - by occupation or industry sector - to a central network. Such a plan could pool multiple employer and employee contributions, while guaranteeing full portability. The system could be sponsored by associations and provide coverage to non-traditional workers.
- Increase individual savings for retirement by providing both employees and self-employed workers with tax-sheltered voluntary retirement savings arrangements (such as IRA and Keogh plans). Encourage Congress to modify IRA rules to enable more individuals to participate, increase the IRA contribution limit, and index the contribution limit for inflation
- Support efforts to strengthen the Social Security system to ensure its continuing solvency and reliability as a source of basic support for retired and disabled workers and their families and the survivors of deceased workers
- Urge the President and Congress to make a commitment to retirement income security by: (1) establishing a federal commission to evaluate retirement income savings; alternative financing arrangements, and the feasibility of occupational retirement plans; and (2) developing a comprehensive national retirement income policy
Society Statements
AIChE
ASCE
ASME
IEEE-USA