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Resolutions & Amendments

36th International Convention - Anaheim, CA (2004)

Preserving Retirement Security

Resolution No. 75
36th International Convention
June 21 - 25, 2004
Anaheim, CA


Today, one in eight Americans is age 65 and older. However, as the baby boomer generation begins to retire in 2010, the percentage of older Americans will increase significantly. By 2040, one in four will be in that age group. At the same time, life expectancy continues to rise; and


One of the most effective ways to ensure retirement security is through a pension. Yet over 50 million Americans are still not covered by any employer provided system. The vast majority of public employees, however, do have guaranteed pensions that are not dependent on the success of uncertain forces within our modern financial markets; and


Most public sector employees are covered by defined benefit pension plans, which provide a pre-determined retirement benefit, usually by formula. In contrast, defined contribution plans provide only a pre-determined contribution rate. In recent years, numerous private sector employers have replaced their defined benefit plans with defined contribution plans, and there is increasing pressure for public employers to do the same; and


The United States is facing growing economic uncertainty. Our nation has experienced a consistently unstable stock market, as well as a new era of greedy corporate executives known for gross mishandling of their company funds and stock, leading to thousands of employees losing their retirement benefits, and to a sense of financial uncertainty for many thousands more. These factors, as well as a sagging economy under the Bush administration, show the need for greater stability in planning for retirement; and


Despite the security provided by defined benefit plans, opponents, including the American Legislative Exchange Council (ALEC) and Grover Norquist, head of Americans for Tax Reform (ATR), have undertaken an organized, targeted campaign to discredit these plans, arguing that they are a costly liability to taxpayers. They propose defined contribution plans, which introduce considerably higher financial risk for employees; and


These right wing groups want public pensions to be under the control of Wall Street money mangers, who are governed by corporate profits rather than the fiduciary interests of employees; and


While defined contribution plans may offer the opportunity for larger profits during periods of favorable stock market growth, they offer no guarantees or specified benefits should the market fail or individuals make poor investments; and


Defined contribution plans can be a useful supplement to pension plans and employees should be given access to them, but they should not be the only option.


That AFSCME is opposed to efforts to dismantle secure defined benefit plans; and


That AFSCME supports voluntary employee participation in defined contribution plans as a supplement to coverage under a defined benefit plan; and


That no employer, government agency, corporate executive, Wall Street executive, or any individual in charge of decisions regarding pension funding should expose pension beneficiaries to unnecessary financial risk.


Robin Mariani Moffit, Delegate
AFSCME Council 75