Issues

Sample Letter from Fund

Dear [name],

As you know, retirement security is a critical issue facing policymakers in [state/city] and on the national level. And rightfully so.

Nearly 78 million “baby boomers” are edging closer to retirement. The solvency of Social Security is in question. The personal savings rate is negative for the first time since the Great Depression. At the same time, federal and state budgets for entitlement programs are under immense pressure. In fact, the Government Accountability Office expects that by 2030, the cost of Social Security, Medicare, Medicaid and interest on the federal debt will consume all of the government's revenue.

In our state, [add any available data on number of individuals expected o retire, pressure on state budget].

A stable retirement is widely considered to consist of “three legs” – personal savings, Social Security, and a defined benefit pension. Two of the legs – Social Security and personal savings – appear to be unstable. The third leg, employer-sponsored defined benefit pensions, takes on a new importance for ensuring that millions of working Americans [or number of retirees in our state] can retire with dignity.

For more than 100 years, traditional pension plans – also known as defined benefit plans – have served as the cornerstone of the nation’s retirement system. Generations of Americans [in state] have relied upon these plans as a stable and reliable source of retirement income – not only for workers, but also for their families.

Today, defined benefit pensions remain fundamental to our retirement infrastructure. Nationally, the vast majority of pensions are well funded and prepared to continue providing a stable and secure income to retirees. [Add any positive state/plan specific funding level data, number of plans, etc.]

As such, it is critical that we retain traditional pension plans as the cornerstone of our national and state retirement infrastructure. Here’s why:

  • In [state/city], defined benefit pensions paid out [fill in number, provide context], enabling hardworking Americans to retire with dignity. Without this retirement income, more citizens of [state/city] are expected to depend upon federal and state entitlement programs for assistance. [If appropriate, these benefits are a no/low cost to taxpayers]
  • Defined benefit pensions fuel our [state/city] economy. [Add your specific data on the benefits paid out, how much money held in pension fund, impacts for the local/state economy]
  • Defined benefit pensions foster investment capital and economic growth. Today, defined benefit pension funds hold more than $4 trillion in U.S. publicly traded equities representing more than 26 percent of the U.S. public equity market. These assets increase the pool of long-term capital.
  • Defined benefit pensions provide higher overall returns than individual savings accounts such as 401(k) plans. This is because the administrative costs are lower for pension funds, and the investments are pooled and professionally managed. The median 17-year return through 2000 for a defined benefit plan was 13.1 percent, while the average individual investor had a 5.2 percent return for the same period. [Insert any compelling data from your plan/state]
  • Nationally, defined benefit pensions pay an estimated $250 billion in benefits on an annual basis to retired workers and spouses in virtually every city, town, and state across America.
  • More than 64 millions workers and retirees across the country depend upon defined benefit pensions to help provide a secure retirement income that will last until their deaths. In 2003, nearly one-third of Americans over the age of 65 received a defined benefit pension.

As you can see, the traditional pension system is critical for the nation’s retirement infrastructure and economy. We look forward to working with you to preserve and strengthen pensions in [state] to protect the retirement security of our local working citizens, businesses, and economy.

[Add anything else relevant – like to set up a meeting, provide background information, etc.]

Sincerely,
Signature 

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