More than half (51.3%) of retirees rank the security of their pensions and retirement savings as the most important issue they face, according to results of an online survey conducted by ProtectSeniors.Org, in conjunction with former Chairman of the Richmond Federal Reserve Bank and former White House Employee Retirement Income Security Act (ERISA) adviser Dr. Thomas J. Mackell Jr. Another 9.9% are concerned about the adequacy of their pension or retirement savings to meet their future needs.
Nearly one-third (30%) of retirees polled say they are concerned their defined pension benefits could be transferred to an insurance annuity, resulting in loss of ERISA and Pension Benefit Guaranty Corporation (PBGC) protections. Nearly four in 10 (37.9%) say their pensions have already been transferred to an insurance company and converted to an annuity.
Respondents were almost unanimous (98.1%) in their support of legislation that would protect retirees whose defined benefit (DB) pensions have or could be sold off by their former employers in a transaction referred to as pension de-risking, resulting in the loss of ERISA protections.
“As major U.S. corporations continue to try to dump their pension and health care obligations on insurers who will convert those defined benefits into annuities, retirees have become justifiably fearful about the prospect of negative impacts on their economic security,” says Mackell. “As the survey results show, these fears are becoming of greater concern to retirees, and they want action taken to protect their interests and security.”
The survey also found that 83.2% of respondents say they fear losing the supplemental health care benefits provided by their former employers. Nearly 11% have already lost those benefits; 24.3% say the supplemental health care benefits previously provided by their former employers have already been switched over into a health care exchange plan. About one-third of retirees view the loss of retiree health care benefits as the most important issue they face.
Nearly 60% of respondents say they want larger increases in their Social Security cost-of-living adjustments (COLAs). When asked how they would use the extra money:
- 55.7% say to pay for medical care;
- 30.5% say for shopping or dining;
- 30.2% say they would save it;
- 29.7% say they would pay off debt;
- 27.2% say they would help family members; and
- 7.3% say they would pay for living essentials.
“The fact that over 55% would use a Social Security increase to meet health care needs and almost 30% to pay off debt is a troubling signal,” says Mackell.
To keep Social Security solvent, a total of 73.1% of respondents favor a variety of eligibility rule changes, either separately or in combination. The survey found 33% believe senior citizens who receive more than $150,000 a year in retirement income should not be eligible to collect Social Security; 26.8% advocate raising the minimum Social Security retirement age to 67 from 62; and 12.9% favor a combination that includes raising the age minimum, cutting off seniors who receive more than $150,000 a year in retirement income, and implementing the Chained Consumer Price Index (CPI) to calculate annual COLAs.
Only 3.1% of respondents favor use of the Chained CPI, which assumes that as prices for one product rise consumers will choose a less expensive alternative. Approximately one in four respondents (23.8%) do not support any of the changes to Social Security eligibility rules the other respondents favored.
The survey poll was conducted online from December 5 to 20, 2013, and received 1,111 responses, including from retirees from Verizon and General Motors, where pension de-risking transactions have previously occurred. The survey can be found at www.protectseniors.org.
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