RE: Archer/Shaw Social Security Guarantee Plan and Concerns of Younger Workers

[National Dialogue Moderator <moderator>]

I want to respond to some of the excellent points you make regarding the overall retirement landscape.

You write, "workers should be given more 
opportunity to increase/maximize their private retirement funding 
opportunities."

I strongly agree.  That is why the President's USA account proposal is such a good idea.  This plan target lower and middle income workers -- the group you point out is most likely to have little or no retirement savings.  USAs are created wholly apart from Social Security, leaving the benefit guarantees of that program fully intact.

You also write, "if workers are going to participate in 
retirement funding/investment decisions they need to receive adequate 
non-partisan information and education to allow them to make informed
decisions."

Without a doubt, many workers are avoiding the investment opportunities available in the stock market because they don't have the information they need.  Others will dive into the stock market with inadequate preparation, and will make unwise decisions and thus lose their savings.  If we are to have a retirement policy that requires or strongly encourages investment in the stock market, there will have to be a concerted effort to increase our nation's financial literacy.  One approach we might consider is to increase financial education in our schools.  

You go on to write, "If younger workers are given an opportunity to participate 
in selection of investment options within defined contribution plans 
and/or are allowed, if not covered, to contribute to an IRA at the
same pre-tax level as 401(k) participants they could significantly 
improve their retirement funding possibilities and there would be no
need to feel the pressure to "opt out" of Social Security in order to
accumulate sufficient retirement savings."

These are excellent points.  There are many opportunities in place and more likely to come to give younger and middle income workers a chance to invest in private equities.  I have worked actively on several major initiatives in this area (one good example is the IRA tax credit I've introduced, H.R. 226) and believe it's highly important.  But, all stock market investment comes with risk to the individual.  That is why I believe Social Security must continue to focus on providing a guaranteed benefit, not on beating the market's performance.

Rep. Earl Pomeroy