“Let Them Eat Cake”: Examining United States Retirement Savings Policy Through The Lens of International Human Rights Principles

This article uses an international human rights framework to analyze and critique the effectiveness of the United States\u27 retirement system and its underlying policies. The article challenges the ongoing pension reform debate to include considerations outside traditional economic theory, such as income inequality, the dignity of the elderly, and the irreducible mutuality of people. While a human rights analysis will not yield a precise policy prescription for the retirement savings crisis, it will serve as an additional framework within which the government\u27s economic and social policies regarding the treatment of the elderly can be evaluated, expanding the focus and range of responses. The article provides an overview of human rights law and the concept of the welfare state as they apply to the elderly, as well as an analysis and critique of the current private retirement system through the lens of human rights law. The final portion of the article sets forth four proposals for pension reform that reflect fundamental human rights considerations aimed at increasing retirement security across the income spectrum. These proposals are as follows: (1) minimum benefits under Social Security should be restructured to prevent individuals with significant work histories from living in or falling into poverty; (2) Social Security benefits should be adjusted using a price index that more accurately reflects the spending patterns of older persons in order to prevent a decline in purchasing power due to inflation; (3) the current wage cap on Social Security taxes should be eliminated to stymie the funding shortfall of the program and to generate new revenue to help pay for the increase in minimum benefits; and (4) to augment the private retirement system, a Universal Retirement Savings Program with Minimum Guaranteed Benefits should be mandated to provide adequate retirement savings and protection against the risk of loss for all workers

The Earned Income Tax Credit: Thou Goest Wither? A Critique of Existing Proposals to Reform the Earned Income Tax Credit

This article places issues concerning reformation of the EITC in perspective and critiques existing proposals to change the program. This article focuses on proposals advanced by Professors Yin and Forman which range from improving the administration of the existing EITC to completely restructuring the entire program. Specifically, this article analyzes and responds to their proposals to (1) redesign the Earned Income Tax Credit by creating a system that uses a rebate of employee Social Security payroll taxes in conjunction with a family allowance benefit, and (2) institute an employer credit program as a substitute for the Earned Income Tax Credit. In order to more completely understand and evaluate the feasibility of the Yin and Forman proposals to modify the EITC, it is useful to examine the effectiveness of the existing EITC program. Accordingly, part I of this article discusses the limitations of the current EITC program. Part II briefly describes the effects of recent changes to the EITC program under the Omnibus Budget Reconciliation Act of 1993 ( the 1993 Act ). Part III explores two of the Yin and Forman proposals to redesign the EITC and analyzes the policy and equity concerns which these proposals raise. Part IV contains a brief conclusion

Defined Benefit Plan Funding: How Much Is Too Much?

Ideally, the role of policymakers is to make laws which effectuate change consistent with public interest. However, in order for policy makers to meet this demand, it is necessary for them to identify distinct issues and their respective causes and long term effects. In furtherance of this goal, as it relates to the issue of accelerated funding of qualified defined benefit plans, this Article will address the following questions: (1) whether it is practical to separate the concept of accelerated funding from impending plan termination, (2) whether the removal of excess assets from terminating plans can be deterred in ways which offset tax-subsidized gains attributable to overfunded amounts rather than in ways which discourage accelerated funding, and (3) whether, in the absence of concerns relating to plan termination, accelerated funding is consistent with pension policy

Rethinking the Risk of Defined Contribution Plans

This article analyzes the risk of shortfall in the expected retirement benefits in defined contribution plans, as regulated by the Employee Retirement Income Security Act of 1974 (ERISA). The article compares and contrasts the allocation of investment risks between defined benefit and defined contribution plans. This article demonstrates that current pension law offers inadequate protection of the expected retirement benefit in defined contribution plans and proposes additional fiduciary, insurance, and funding protection for defined contribution plans

Medical Savings Accounts: Windfalls for the Healthy, Wealthy, and Wise

This article analyzes the Medical Savings Account (MSA) program, and critiques its impact on the retirement and health care systems. The MSA program is an experimental health care program created by The Health Insurance Portability and Accountability Act of 1996. The program allows a limited number of small employers and self-employed individuals to establish MSAs during an experimental period. MSA funds may be used for medical expenses, or carried forward and accumulated tax-free as retirement savings. The underlying purpose of the MSA program is to reduce the cost of medical care by providing consumers greater incentives to be sensitive to health care costs than traditional insurance provides. Based upon the outcome of the MSA experiment, in 2000 Congress will decide whether to abolish or expand the program. On its face the MSA program appears to be an efficacious method of tackling both the overwhelming problem of health care financing, and the increasing need for retirement income security. However, this article demonstrates that the MSA program is a questionable response to these concerns because its underlying policy runs counter to existing retirement income and health care goals. Furthermore, the article shows that the MSA program raises serious issues of fairness as it benefits only relatively few, namely, the healthiest, wealthiest, and most informed members in society. The article acknowledges that the program\u27s failure to deliver health benefits and savings opportunities to all Americans would not render it void of value, or its cost unjustifiable, if it were successful in curbing rising health care costs. However, using health care consumption trends, a comparative analysis, and MSA participation rates the article determines that the MSA program is unlikely to significantly impact medical care costs

Defined Benefit Plan Funding: How Much Is Too Much?

Ideally, the role of policymakers is to make laws which effectuate change consistent with public interest. However, in order for policy makers to meet this demand, it is necessary for them to identify distinct issues and their respective causes and long term effects. In furtherance of this goal, as it relates to the issue of accelerated funding of qualified defined benefit plans, this Article will address the following questions: (1) whether it is practical to separate the concept of accelerated funding from impending plan termination, (2) whether the removal of excess assets from terminating plans can be deterred in ways which offset tax-subsidized gains attributable to overfunded amounts rather than in ways which discourage accelerated funding, and (3) whether, in the absence of concerns relating to plan termination, accelerated funding is consistent with pension policy

Increasing Coverage in Today’s Private Retirement System

Part I of this Reflection describes and critiques the effective-ness of the existing nondiscrimination standards for encouraging in-creased coverage in the private retirement system. Part II examines current trends with respect to various segments of the working population and concludes that existing pension law and policies are providing inadequate retirement benefits to low- and middle-income workers participating in 401(k) plans. Part III proposes the following three recommendations for increasing participation rates in the current pension climate: (1) mandatory education programs for all 401(k) plans; (2) mandatory automatic features in 401(k) plans; and (3) an additional tax incentive to encourage greater par-ticipation of low- and middle-income employees, as measured by their vested accrued benefits