The following proposal was presented by Glenn Beamer at the Re-Envisioning Retirement Security Conference [1] on October 21, 2009.
The Guaranteed Pension and Community Investment Plan
Under Guaranteed Pension and Community Investment (GPCI) Plans workers would contribute five percent of their wages to locally-based funds and receive fully guaranteed lifetime annuities at retirement.
Workers, employers, unions and governments would be encouraged to contribute an additional five to ten percent of wages. An eighty percent refundable tax credit would offset $560 of workers’ first $700 in contributions and replace the current deduction allowed for 401(k) plan contributions. This tax credit would be deficit neutral or would decrease the deficit. The benefit structure would be progressive, and benefits would be fully portable.
Seventy percent of a worker’s account would be invested in a conservative “balance guaranteed account” and the remaining 30 percent would be invested in community development. The plan would be administered by a locally elected board of trustees.
Under the proposal, a worker whose combined age and years of contributions equal or exceed 70 would be eligible for up to three years of job retraining assistance paid for by the interest on their GPCI accounts and time-limited pensions. When workers’ combined age and years of contributions reach 100 they would become eligible to have their account converted into a a lifetime benefit with the option of taking a reduced benefit in return for survivor benefits. The Rule of 100 would allow workers who enter the workforce earlier to retire earlier than those who enter later.
CPCI Community Investment programs would be determined and adopted locally. A federal agency similar to the Pension Benefit Guaranty Corporation will regulate CPCI plans.