AFT - American Federation of Teachers

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AFT Resolutions

RETIREMENT SECURITY

WHEREAS, the federal government, corporations and unions traditionally have worked together with hard-working Americans to maintain the "American dream" in retirement by providing workers with access to financial security to continue independent living and help our children have a better future through a combination of Social Security and Medicare and employer-sponsored pension and retiree healthcare and private savings; and

WHEREAS, the traditional three-legged retirement income stool of Social Security, pension and private savings plus Medicare and employer-sponsored retiree healthcare is now under attack by the current administration and its allies bent on dismantling this social compact among workers, employers and the federal government, shifting all retirement and healthcare risk to individuals; and

WHEREAS, the 76 million baby boomers born between 1946 and 1964—about one-third of our society—will start to become eligible for Social Security, Medicare and private pension and retiree healthcare within the next six years; and

WHEREAS, Social Security privatization would leave many retired workers in poverty, and, as a result, require families and taxpayers to provide them with the guaranteed lifetime benefits they have already earned from a lifetime of work and contributing to Social Security; and

WHEREAS, the latest Social Security Trustees report stated that there is enough money in the system to pay full benefits until 2040, and without any changes Social Security can still pay 74 percent of all promised benefits and that the 75-year funding shortfall is less than 1 percent of our nation's gross domestic product (GDP) and only one-quarter of the revenue generated each year by the 2001 Bush tax cuts; and

WHEREAS, the current administration is working to establish new, draconian private pension funding rules that will encourage private sector employers to end their traditional pension plans, and the U.S. Energy Department has announced it will no longer pay contractors for contributions to traditional pension plans but only 401(k)s and "market-based" medical plans; and

WHEREAS, private corporations are exploiting flawed bankruptcy laws to walk away from long-standing promises to fund traditional pension plans by filing for bankruptcy reorganization and denying workers the benefits they earned; and

WHEREAS, the national shift toward greater and greater use of part-time and temporary workers means that millions of workers have no pensions at all; and

WHEREAS, personal savings, the third retirement leg, is at an all-time low for all Americans; and

WHEREAS, the shift to 401(k)-type private accounts as the replacement for traditional plans shifts all of the risk of investment loss to each individual while providing financial protection to only the highest paid who typically receive the highest contributions as well as stock options and other deferred compensation; and

WHEREAS, a recent survey by the National Association of State Retirement Administrators (NASRA) determined that as a group, state and local pension plans are well funded and have accumulated close to 90 percent of the monies required for benefit payments, and the employee contributions and investment earnings account for about three-fourths of the final benefit, making it a very good deal for taxpayers; and

WHEREAS, Medicare, our nation's most successful public health insurance program, provides hospital and physician services at very little administrative cost to more than 40 million people age 65 and over is increasingly under attack at a time when access to healthcare is already at crisis levels; and

WHEREAS, the most recent Medicare Trustees report states that the Part A Hospital Trust Fund will be broke in 12 years (2018), and is in need of immediate federal support; and

WHEREAS, at the end of 2003, the current administration and its congressional allies pushed through a Medicare Modernization Act aimed at shifting higher premiums and other costs on to Medicare beneficiaries; and

WHEREAS, a major part of the Medicare Modernization Act was the creation of a politically inspired Medicare drug bill (Part D) that, among other things, privatizes administration of the prescription drug benefit and shifts thousands of dollars in out-of-pocket costs to retirees; and

WHEREAS, the Governmental Accounting Standards Board (GASB), the quasi-public body that sets accounting standards for all public entities, has put in place new rules that artificially will hike the long-term cost of retiree healthcare and liabilities of public employers; and

WHEREAS, public employers and plans can avoid reporting the cost of retiree healthcare by eliminating this benefit and leave thousands of public retirees and active workers without retiree healthcare and eventually dependent on Medicaid; and

WHEREAS, the loss of retiree healthcare will harm all public retirees and will be especially hard on retirees in non-Social Security states who are not eligible for Medicare coverage at age 65:

RESOLVED, that the American Federation of Teachers fight to protect and improve Social Security, Medicare and employment-based retirement benefits for career-long workers who have traded off wage increases during their working years for these benefits when they can no longer work; and

RESOLVED, that the AFT urge Congress to pass legislation that will strengthen Medicare finances and to lay out a plan to address the longer-term revenue shortfall in Social Security; and

RESOLVED, that the AFT call on Congress to enact legislation to improve and enhance Part D in the following ways:

  • permit Medicare to negotiate prescription drug prices with manufacturers;
  • require Medicare to administer a universal prescription drug
    benefit;
  • simplify the Part D plan design and  significantly lower out-of-pocket costs;
  • delay the initial penalty-free sign-up period beyond May 15, 2006;
  • permit retirees who gave up employer-sponsored coverage for a Part D plan to re-enroll in the employer plan without penalty; and
  • extend and enhance the subsidies to plan sponsors who maintain retiree prescription drug plans; and

RESOLVED, that the AFT call on Congress to oppose legislation designed to undermine the continuation of private defined-benefit pension plans and enact legislation that would eliminate the use of bankruptcy reorganization as a way for private employers to drop their life-long pension commitments to workers and shift them to retirees and taxpayers; and

RESOLVED, that the AFT adamantly oppose the shift from traditional defined-benefit pension plans to private account-type plans and work in coalition with like-minded groups to make our opinion known in every state legislature considering such a change; and

RESOLVED, that the AFT call on governors and state legislatures to acknowledge that traditional defined-benefit pension plans are generally well funded and provide a good bargain for taxpayers and that they work cooperatively with AFT and other public unions to solve problems as they arise; and

RESOLVED, that the AFT call on Congress to enact legislation to protect and enhance active employee and retiree healthcare by delaying the implementation of GASB OPEB regulations until Congress investigates the impact of these changes on public employees and that Congress intervene to permit plan sponsors to count the full value of any prescription drug subsidy payment received from Medicare as a revenue offset against their OPEB liability; and

RESOLVED, that the AFT mobilize members through all of its communication vehicles in order to provide informational materials on the threats to retirement security and request that members take action in support of retirement security for all workers.


(2006)