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Retirement Income
TC-1 The Policy Book: AARP Public Policies 2004
RETIREMENT INCOME • 3
Table of Contents
INTRODUCTION .......................................................................................................................3-1
AARP PRINCIPLES ..................................................................................................................3-3
SOCIAL SECURITY ..................................................................................................................3-4
The Long-Term Status of the Trust Funds ......................................................................3-5
SOCIAL SECURITY REFORM PROPOSALS ..........................................................................3-6
AARP Principles for Social Security Reform...................................................................3-8 Supplemental Savings Accounts .....................................................................................3-9 Replacing a Portion of Social Security Benefits with Individual Accounts................3-10 Wage vs. Price Indexing..................................................................................................3-12 Diversification of Trust Fund Investments ....................................................................3-13 Taxation of Benefits.........................................................................................................3-14 Affluence Testing and Means Testing............................................................................3-15 Cost-of-Living Adjustments ............................................................................................3-16 Full/Normal Retirement Age............................................................................................3-18 Early Retirement Eligibility..............................................................................................3-19 Years in the Benefit Calculation .....................................................................................3-20 The Wage Base.................................................................................................................3-20 Coverage of State and Local Government Workers .....................................................3-21
SOCIAL SECURITY QUALITY OF SERVICE AND ADMINISTRATION................................3-22
SOCIAL SECURITY BENEFIT ISSUES
Benefit Adequacy Women ........................................................................................................................3-23 Earnings Limit ..................................................................................................................3-24
THE SOCIAL SECURITY NOTCH ..........................................................................................3-25
DISABILITY INSURANCE.......................................................................................................3-26
Administration and Determination of Disability............................................................3-27 Work Incentives................................................................................................................3-29 Rehabilitation ...................................................................................................................3-29
PRIVATE PENSIONS..............................................................................................................3-30
Reforms and Simplification.............................................................................................3-31 Cash Balance Plans.........................................................................................................3-33 Nondiscrimination and Top-Heavy Rules ......................................................................3-34
Retirement Income
The Policy Book: AARP Public Policies 2004 TC-2
PRIVATE PENSIONS (CONT.)
Coverage and Benefits Coverage and Participation.......................................................................................3-35 Small-Business, Service Industry, Self-Employed, Contingent and Part-Time Employees ...................................................................................3-36 Portability, Preservation and Distributions .............................................................3-38 Vesting ........................................................................................................................3-39 Integration...................................................................................................................3-40 Spousal Rights ...........................................................................................................3-41 Eligibility for Dependent and Nonspouse Survivor Pensions ...............................3-41 Plan Funding and Guarantees Terminations for Reversions and Plan Transfers ...................................................3-42 Pension Benefit Guaranty Corporation....................................................................3-43 Enforcement of Employee Retirement Income Security Act Rights .....................3-44 Management and Investments..................................................................................3-45 Employee Retirement Income Security Act Preemption ........................................3-47
PUBLIC RETIREMENT SYSTEMS .........................................................................................3-47
Railroad Retirement .........................................................................................................3-48 State and Local Public Pensions....................................................................................3-49 Spousal Rights .................................................................................................................3-51
POSTRETIREMENT HEALTH BENEFITS .............................................................................3-52
RETIREMENT SAVINGS AND ASSETS EXPANSION ..........................................................3-53
Figure 3-1: Percentage of People Age 65+ Receiving Income from Various Sources, 2000 ...............................................................................3-1 Figure 3-2: Percentage of People Age 65+ Receiving Income from Social Security, by Income Quintile, 2000................................................3-2 Figure 3-3: Social Security as a Percentage of Income for People Aged 65 and Older, 2000............................................................................3-4 Figure 3-4: Age for Full/Normal Retirement Benefits .....................................................3-18
Retirement Income
The Policy Book: AARP Public Policies 2004 3-1
RETIREMENT INCOME INTRODUCTION
Retirement Income
3-2 The Policy Book: AARP Public Policies 2004
Retirement Income
The Policy Book: AARP Public Policies 2004 3-3
RETIREMENT INCOME
AARP PRINCIPLES
Retirement Income
3-4 The Policy Book: AARP Public Policies 2004
SOCIAL SECURITY
Background
Retirement Income
The Policy Book: AARP Public Policies 2004 3-5
SOCIAL SECURITY
Background
The Long-Term Status of the Trust Funds
FEDERAL POLICY SOCIAL SECURITY
The Long-Term Status of the Trust Funds
Retirement Income
3-6 The Policy Book: AARP Public Policies 2004
SOCIAL SECURITY REFORM PROPOSALS
Background
Retirement Income
The Policy Book: AARP Public Policies 2004 3-7
FEDERAL POLICY SOCIAL SECURITY REFORM PROPOSALS
.
Retirement Income
3-8 The Policy Book: AARP Public Policies 2004
SOCIAL SECURITY REFORM PROPOSALS
AARP Principles for Social Security Reform
Retirement Income
The Policy Book: AARP Public Policies 2004 3-9
SOCIAL SECURITY REFORM PROPOSALS
Background
Supplemental Savings Accounts
FEDERAL POLICY SOCIAL SECURITY REFORM PROPOSALS
Supplemental Savings Accounts
Retirement Income
3-10 The Policy Book: AARP Public Policies 2004
SOCIAL SECURITY REFORM PROPOSALS
Background
Replacing a Portion of Social Security Benefits with Individual Accounts
Retirement Income
The Policy Book: AARP Public Policies 2004 3-11
FEDERAL POLICY SOCIAL SECURITY REFORM PROPOSALS
Replacing a Portion of Social Security Benefits with Individual Accounts
Retirement Income
3-12 The Policy Book: AARP Public Policies 2004
SOCIAL SECURITY REFORM PROPOSALS
Background
Wage vs. Price Indexing
FEDERAL POLICY SOCIAL SECURITY REFORM PROPOSALS
Wage vs. Price Indexing
Retirement Income
The Policy Book: AARP Public Policies 2004 3-13
SOCIAL SECURITY REFORM PROPOSALS
Background
Diversification of Trust Fund Investments
Retirement Income
3-14 The Policy Book: AARP Public Policies 2004
FEDERAL POLICY SOCIAL SECURITY REFORM PROPOSALS
Diversification of Trust Fund Investments
SOCIAL SECURITY REFORM PROPOSALS
Background
Taxation of Benefits
Retirement Income
The Policy Book: AARP Public Policies 2004 3-15
FEDERAL POLICY SOCIAL SECURITY REFORM PROPOSALS
Taxation of Benefits
SOCIAL SECURITY REFORM PROPOSALS
Background
Affluence Testing and Means Testing
Retirement Income
3-16 The Policy Book: AARP Public Policies 2004
FEDERAL POLICY SOCIAL SECURITY REFORM PROPOSALS
Affluence Testing and Means Testing
SOCIAL SECURITY REFORM PROPOSALS
Background
Cost-of-Living Adjustments
Retirement Income
The Policy Book: AARP Public Policies 2004 3-17
FEDERAL POLICY SOCIAL SECURITY REFORM PROPOSALS
Cost-of-Living Adjustments
Retirement Income
3-18 The Policy Book: AARP Public Policies 2004
SOCIAL SECURITY REFORM PROPOSALS
Background
Full/Normal Retirement Age
Retirement Income
The Policy Book: AARP Public Policies 2004 3-19
FEDERAL POLICY SOCIAL SECURITY REFORM PROPOSALS
Full/Normal Retirement Age
SOCIAL SECURITY REFORM PROPOSALS
Background
Early Retirement Eligibility
FEDERAL POLICY SOCIAL SECURITY REFORM PROPOSALS
Early Retirement Eligibility
Retirement Income
3-20 The Policy Book: AARP Public Policies 2004
SOCIAL SECURITY REFORM PROPOSALS
Background
Years in the Benefit Calculation
FEDERAL POLICY SOCIAL SECURITY REFORM PROPOSALS
Years in the Benefit Calculation
SOCIAL SECURITY REFORM PROPOSALS
Background
The Wage Base
Retirement Income
The Policy Book: AARP Public Policies 2004 3-21
FEDERAL POLICY SOCIAL SECURITY REFORM PROPOSALS
The Wage Base
SOCIAL SECURITY REFORM PROPOSALS
Background
Coverage of State and Local Government Workers
Retirement Income
3-22 The Policy Book: AARP Public Policies 2004
FEDERAL POLICY SOCIAL SECURITY REFORM PROPOSALS
Coverage of State and Local Government Workers
SOCIAL SECURITY QUALITY OF SERVICE AND ADMINISTRATION
Background
Retirement Income
The Policy Book: AARP Public Policies 2004 3-23
FEDERAL POLICY SOCIAL SECURITY QUALITY OF SERVICE AND ADMINISTRATION
SOCIAL SECURITY BENEFIT ISSUES •••• Benefit Adequacy
Background
Women
Retirement Income
3-24 The Policy Book: AARP Public Policies 2004
FEDERAL POLICY SOCIAL SECURITY BENEFIT ISSUES • Benefit Adequacy
Women
SOCIAL SECURITY BENEFIT ISSUES
Background
Earnings Limit
Retirement Income
The Policy Book: AARP Public Policies 2004 3-25
FEDERAL POLICY SOCIAL SECURITY BENEFIT ISSUES
Earnings Limit
THE SOCIAL SECURITY NOTCH
Background
FEDERAL POLICY THE SOCIAL SECURITY NOTCH
Retirement Income
3-26 The Policy Book: AARP Public Policies 2004
DISABILITY INSURANCE
Background
FEDERAL POLICY DISABILITY INSURANCE
Retirement Income
The Policy Book: AARP Public Policies 2004 3-27
DISABILITY INSURANCE
Background
Administration and Determination of Disability
Retirement Income
3-28 The Policy Book: AARP Public Policies 2004
FEDERAL POLICY DISABILITY INSURANCE
Administration and Determination of Disability
Retirement Income
The Policy Book: AARP Public Policies 2004 3-29
DISABILITY INSURANCE
Background
Work Incentives
FEDERAL POLICY DISABILITY INSURANCE
Work Incentives
DISABILITY INSURANCE
Background
Rehabilitation
Retirement Income
3-30 The Policy Book: AARP Public Policies 2004
FEDERAL POLICY DISABILITY INSURANCE
Rehabilitation
PRIVATE PENSIONS
Background
Retirement Income
The Policy Book: AARP Public Policies 2004 3-31
PRIVATE PENSIONS
Background
Reforms and Simplification
Retirement Income
3-32 The Policy Book: AARP Public Policies 2004
FEDERAL POLICY PRIVATE PENSIONS
Reforms and Simplification
Retirement Income
The Policy Book: AARP Public Policies 2004 3-33
PRIVATE PENSIONS
Background
Cash Balance Plans
Retirement Income
3-34 The Policy Book: AARP Public Policies 2004
FEDERAL POLICY PRIVATE PENSIONS
Cash Balance Plans
PRIVATE PENSIONS
Background
Nondiscrimination and Top-Heavy Rules
Retirement Income
The Policy Book: AARP Public Policies 2004 3-35
FEDERAL POLICY PRIVATE PENSIONS
Nondiscrimination and Top-Heavy Rules
PRIVATE PENSIONS •••• Coverage and Benefits
Background
Coverage and Participation
Retirement Income
3-36 The Policy Book: AARP Public Policies 2004
FEDERAL POLICY PRIVATE PENSIONS • Coverage and Benefits
Coverage and Participation
PRIVATE PENSIONS •••• Coverage and Benefits
Background
Small-Business, Service Industry, Self-Employed, Contingent and Part-Time Employees
Retirement Income
The Policy Book: AARP Public Policies 2004 3-37
FEDERAL POLICY PRIVATE PENSIONS • Coverage and Benefits
Small-Business, Service Industry, Self-Employed, Contingent and Part-Time Employees
Retirement Income
3-38 The Policy Book: AARP Public Policies 2004
PRIVATE PENSIONS •••• Coverage and Benefits
Background
Portability, Preservation and Distributions
Retirement Income
The Policy Book: AARP Public Policies 2004 3-39
FEDERAL POLICY PRIVATE PENSIONS • Coverage and Benefits
Portability, Preservation and Distributions
PRIVATE PENSIONS •••• Coverage and Benefits
Background
Vesting
Retirement Income
3-40 The Policy Book: AARP Public Policies 2004
FEDERAL POLICY PRIVATE PENSIONS • Coverage and Benefits
Vesting
PRIVATE PENSIONS •••• Coverage and Benefits
Background
Integration
FEDERAL POLICY PRIVATE PENSIONS • Coverage and Benefits
Integration
Retirement Income
The Policy Book: AARP Public Policies 2004 3-41
PRIVATE PENSIONS •••• Coverage and Benefits
Background
Spousal Rights
FEDERAL POLICY PRIVATE PENSIONS • Coverage and Benefits
Spousal Rights
PRIVATE PENSIONS •••• Coverage and Benefits
Background
Eligibility for Dependent and Nonspouse Survivor Pensions
Retirement Income
3-42 The Policy Book: AARP Public Policies 2004
FEDERAL POLICY PRIVATE PENSIONS • Coverage and Benefits
Eligibility for Dependent and Nonspouse Survivor Pensions
PRIVATE PENSIONS •••• Plan Funding and Guarantees
Background
Terminations for Reversions and Plan Transfers
FEDERAL POLICY PRIVATE PENSIONS • Plan Funding and Guarantees
Terminations for Reversions and Plan Transfers
Retirement Income
The Policy Book: AARP Public Policies 2004 3-43
PRIVATE PENSIONS •••• Plan Funding and Guarantees
Background
Pension Benefit Guaranty Corporation
FEDERAL POLICY PRIVATE PENSIONS • Plan Funding and Guarantees
Pension Benefit Guaranty Corporation
Retirement Income
3-44 The Policy Book: AARP Public Policies 2004
PRIVATE PENSIONS •••• Plan Funding and Guarantees
Background
Enforcement of Employee Retirement Income Security Act Rights
FEDERAL POLICY PRIVATE PENSIONS • Plan Funding and Guarantees
Enforcement of Employee Retirement Income Security Act Rights
Retirement Income
The Policy Book: AARP Public Policies 2004 3-45
PRIVATE PENSIONS •••• Plan Funding and Guarantees
Background
Management and Investments
Retirement Income
3-46 The Policy Book: AARP Public Policies 2004
FEDERAL POLICY PRIVATE PENSIONS • Plan Funding and Guarantees
Management and Investments
Retirement Income
The Policy Book: AARP Public Policies 2004 3-47
PRIVATE PENSIONS •••• Plan Funding and Guarantees
Background
Employee Retirement Income Security Act Preemption
FEDERAL POLICY PRIVATE PENSIONS • Plan Funding and Guarantees
Employee Retirement Income Security Act Preemption
PUBLIC RETIREMENT SYSTEMS
Background
Retirement Income
3-48 The Policy Book: AARP Public Policies 2004
FEDERAL POLICY PUBLIC RETIREMENT SYSTEMS
PUBLIC RETIREMENT SYSTEMS
Background
Railroad Retirement
Retirement Income
The Policy Book: AARP Public Policies 2004 3-49
FEDERAL POLICY PUBLIC RETIREMENT SYSTEMS
Railroad Retirement
PUBLIC RETIREMENT SYSTEMS
Background
State and Local Public Pensions
Retirement Income
3-50 The Policy Book: AARP Public Policies 2004
STATE & LOCAL POLICY PUBLIC RETIREMENT SYSTEMS
State and Local Public Pensions
Retirement Income
The Policy Book: AARP Public Policies 2004 3-51
PUBLIC RETIREMENT SYSTEMS
Background
Spousal Rights
FEDERAL POLICY PUBLIC RETIREMENT SYSTEMS
Spousal Rights
Retirement Income
3-52 The Policy Book: AARP Public Policies 2004
STATE & LOCAL POLICY PUBLIC RETIREMENT SYSTEMS
Spousal Rights
POSTRETIREMENT HEALTH BENEFITS
Background
Retirement Income
The Policy Book: AARP Public Policies 2004 3-53
FEDERAL POLICY POSTRETIREMENT HEALTH BENEFITS
STATE POLICY POSTRETIREMENT HEALTH BENEFITS
RETIREMENT SAVINGS AND ASSETS EXPANSION
Background
Retirement Income
3-54 The Policy Book: AARP Public Policies 2004
FEDERAL & STATE POLICY RETIREMENT SAVINGS AND ASSETS EXPANSION
