We could have a viable, guaranteed, defined benefit pension system for ALL Americans, if we have the political will to do it. The model exists right now for the employees of one industry, but it could be expanded, like the proposals for Medicare. Railroad Retirement (RRTA), the government-run, employer/employee funded pension and retirement system for most U. S. railroaders, is totally separate from - and better - than Social Security. It consists of two tiers, a base Social Security level of benefits for retirees and survivors, and a pension-like level, funded by investments of the fund. Like Social Security, it is a pay-forward system, current employees pay for the benefits of current retirees.
Where it is far superior to what most Americans have now are several features: 1) It is totally separate from any employer. They have absolutely no say or control over the funds. They are not assets of any railroad, and cannot be lost in a bankruptcy, merger, or buyout. 2) A railroader’s pension is totally transferable between railroad employers. They do not start over accruing benefits if they change railroads, or are furloughed or fired for any reason. 3) There is no “good behavior” restriction on getting this pension. The money is theirs, period. Even if an employee is fired “for cause” they do not lose the money in their pension plan, and they can’t lose it because an employer decides they are going to lay off “expensive” employees right before they are due to retire.
We can do this for the rest of the country. There is absolutely no reason other than political will everyone currently under Social Security could not have a plan like this. Now, yes, railroaders and railroads do pay more in retirement taxes up-front for this system, but every railroader has the right to retire after age 60 and 30 years of service. The best part is that for most, it provides a livable retirement income, without having to be a Wal-Mart greeter on the side! The only real problem with it is that currently early retirees have to pick-up their own health insurance costs until they qualify for Medicare at age 65 (which does prevent many from retiring early), but if we can get national single-payer health care, that issue goes away as well.