The group will provide suggestions to address private-sector workers without access to retirement savings
PHILADELPHIA – June 16, 2016 – Spurred by troubling testimony from Philadelphia residents and a new study commissioned by City Council, Councilwoman Cherelle L. Parker (9th District) announced Wednesday that she will introduce a resolution calling for the creation of a task force to address retirement security for private-sector workers in the City of Philadelphia.
“People are starting to wake up and realize that we have a real retirement crisis on our hands, which is impacting the country as a whole and Philadelphia in particular,” Councilwoman Parker said. “While we would love for federal officials to craft a solution, it’s clear that big cities like New York and Philadelphia must take action now.”
A study from the Schwartz Center for Economic Policy Analysis at The New School for Social Research, released Wednesday during a hearing by Council’s Committee on Labor and Civil Service, found that Philadelphia retirees and workers are in even worse shape than workers and retirees nationwide. In Philadelphia, 20 percent of retirees are poor, compared with 9 percent nationwide, and 30 percent have incomes between 100 and 200 percent of the federal poverty level, compared with 23 percent nationwide.
Additionally, in Philadelphia, 48 percent of workers ages 25-64 work for an employer that sponsors a plan, compared with 53 percent nationwide, and 37 percent of workers actually participate in a plan, compared with 45 percent nationwide.
“Extending retirement plan coverage to these households will not give them the retirement of their dreams,” said Anthony Webb, research director of the Retirement Equity Lab at the Schwartz Center. “But expanded coverage would lift significant numbers of households out of poverty and near poverty. The sooner we act, the more of these households can be helped.”
In 2015, the National Institute on Retirement Security conducted a national survey of Americans to understand public sentiment on a range of retirement security issues. The research found that 86 percent of Americans believe that the nation faces a retirement crisis, with 57 percent strongly agreeing there is a crisis. Among millennials who are just starting their careers, 92 percent believe that the nation faces a retirement crisis.
“There is a large retirement savings shortfall, and many Americans face the prospect of continuing to work past the age of 65 (if they are physically able and can find employment), substantially reducing their standard of living, or turning to families and local government for financial assistance,” said Diane Oakley, executive director of NIRS. “This situation will have negative impacts on our economy, government budgets and families.”
West Philadelphia resident Phyllis Ridenhour, 66, testified that she saved $35,000 in a 401(k), but after she was forced to retire, she had to withdraw the money for critical home repairs and to pay for her son’s medical bills. She now receives $1,054 per month from Social Security and works a part-time job at minimum wage through a program for seniors.
“After making my mortgage payment, I have a very difficult time affording my utility bills. My gas was cut off last November, and I had to use an electric space heater,” Ms. Ridenhour said. “I’ve applied for all of the programs that I [thought I] qualify for, but unfortunately I don’t qualify for many of them because I’m told that I have too much income.
She added, “Thank you for considering what kinds of programs would help Philadelphia seniors have a more secure retirement.”
“We thank the Schwartz Center for their research and for all others who took part in our fact-finding,” Councilwoman Parker said. “We recognize that there is no one-size-fits-all solution, but we look forward to coming up with viable options to address the needs of Philadelphia residents.”
The task force will be comprised of various stakeholders from the private and nonprofit sectors, all levels of government and co-chaired by Councilwoman Parker, chair of Council’s Committee on Labor and Civil Service, and Councilman Al Taubenberger, (R, At-Large) chair of Council’s Committee on Aging.
Councilwoman Cherelle L. Parker is in her first term representing the 9th Council District. Parker previously served in the Pennsylvania House of Representatives serving the 200th Legislative District. More information at phlcouncil.com/CherelleParker
Video of the hearing by Council’s Committee on Labor and Civil Service will be posted shortly.