CREDO Action

Tell Congress: Reject retirement scams and expand Social Security

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Petition to the Senate:

"Reject the provisions in the SECURE Act that would allow annuities providers to scam retirees out of their hard-earned savings, and instead focus on expanding Social Security by passing the Social Security 2100 Act."

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    Tell Congress: Reject retirement scams and expand Social Security

    Social Security is one of the most successful government programs in our history, helping to keep tens of millions of Americans out of poverty over the past 80 years.

    But instead of fighting to expand Social Security, some Democrats in Congress are pushing a bipartisan retirement package that contains a massive giveaway to Wall Street that would allow companies to defraud retirees.1

    This legislation just passed the House of Representatives. We need to ramp up pressure on the Senate to stand up to rich Wall Street donors and get their priorities straight. The security of hard-earned retirement savings should come first.

    Tell Congress: Reject retirement scams and expand Social Security.

    Wall Street‒backed insurance companies have been fighting for this giveaway for years. The legislation, called the SECURE Act in the House of Representatives, would give employers immunity if their workers are scammed out of retirement savings that are invested in annuities. The immunity – called safe harbor – would allow employers to pick annuities based on kickbacks or how little they cost upfront. The annuity company could later declare bankruptcy and workers would have no ability to sue their employer to recover their savings.2

    That's exactly what happens right now to many public employees with 403(b) plans. The new legislation would expand these scams to 401(k) plans, with too few safeguards and no rules insisting companies sell only fixed-payment plans instead of predatory variable annuities.3

    Why would Democrats fight for this legislation instead of expanding Social Security? Look no further than Democratic Rep. Richard Neal, who crafted the legislation with Republicans on his committee. The companies that would benefit include:4

    ...some of Neal’s biggest donors, including Prudential, whose political action committee delivered $5,000 to Neal last quarter. Or the American Council of Life Insurers PAC, another $5,000 donor, whose members also sell annuities. Or Mass Mutual Life Insurance Company. Or New York Life. Or Liberty Mutual. Or TIAA. Or the Insured Retirement Institute, an industry PAC. Or the Association for Advanced Life Underwriting PAC, another trade group that immediately praised the SECURE Act’s committee passage. The Investment Company Institute, a trade group for mutual funds (that also benefit from the SECURE Act), is another Neal donor.

    It's not too late to get the Senate to reject this awful retirement scam loophole – if we speak out now.

    Tell Congress: Reject retirement scams and expand Social Security.

    If Congress really wants to protect Americans' retirement, there is a simple answer: Expand Social Security. Social Security is a time-tested program that can pay all the benefits we earned through 2034 and nearly 80% after without any changes. Forcing the wealthy to pay their fair share will secure the program for all of us into the next century.

    The Social Security 2100 Act would increase Social Security benefits for all of us, force millionaires and billionaires to pay the same rate as everyone else, protect low income workers by increasing the minimum monthly benefit, and guard against inflation by indexing benefits to what the elderly really must spend money on.5 Instead of throwing retirees to the wolves in order to win support from major Wall Street donors, our elected representatives should be fighting to expand Social Security.

    Tell Congress: Reject retirement scams and expand Social Security.

    Thank you for speaking out.

    References:

    1. David Dayen, "The House has found bipartisan agreement on reform to retirement accounts. Be afraid." The Intercept, May 22, 2019.
    2. Ibid.
    3. Ibid.
    4. Ibid.
    5. Rep. John Larson, "The Social Security 2100 Act," accessed June 6, 2019.