Washington, D.C. -- As the Enron debacle has underscored, comprehensive reform of our private retirement system is long overdue, but the Bush Administration's piecemeal pension reform proposals do not go far enough. The Progressive Policy Institute (PPI) is unveiling a sweeping policy proposal to simplify and modernize the nation's private retirement security system.

In "Universal Pensions: A Commonsense Approach to Retirement Security in the New Economy," PPI senior fellow and Columbia University adjunct professor Paul Weinstein Jr. presents a plan to provide access for all Americans to retirement security, and to reform the tax code by replacing 16 different tax-favored retirement accounts with one Universal Pension (UP). The proposal will also:

• give every working American a $500 retirement stake at the age of 25;
• make the retirement savings tax credit available to all by making it refundable for low-income Americans;
• give workers who have been with a company for three years the power to control their own 401(k), instead of their employer making all their investment decisions for them; and
• ensure parents do not lose their 401(k) savings if they choose to take care of their children full-time.

Today President Bush will reiterate his support for allowing all employees to sell their company's stock after three years and to forbid top executives from selling stock during periods when lower-ranking employees can not. While these are useful small steps, the Bush plan does nothing to truly prevent future Enron debacles, simplify the current system, or make it easier for more Americans to adequately save for their future.

Weinstein argues that the current system of tax-favored retirement accounts fails to provide adequate retirement security because: it is overly complex and confusing to the American taxpayer; it does not provide universal access to all Americans; benefits are not portable from job to job; and the savings incentives are not generous enough for low to moderate income Americans.

"Despite the expenditure of billions of dollars and the creation of 16 different tax-favored retirement accounts since the 1970s, the number of Americans who are adequately saving for their retirement has remained essentially unchanged," said Weinstein. "Americans shouldn't have to hire an accountant to start a retirement account. Congress should create one account that all Americans can use, so we'll have more savings instead of more confusion."

The PPI policy report outlines a strategy to create a universal pension system - a simple alternative to replace the current confusing myriad of tax-favored retirement accounts, which discourages the average American from adequately saving for their future. This new UP proposal will provide:

• Universal Access. Universal Pensions would provide access to retirement security to all who work hard and play by the rules by giving every working American a $500 retirement stake at age 25. To further encourage low-income families to save, a 50% refundable tax credit would be provided to families that contribute annually to their Universal Pension.
• Portability. Unlike traditional defined benefit plans and 401(k)'s, a Universal Pension would move with workers from job to job. When a worker changes job, his or her 401(k) account would seamlessly transfer to their Universal Pension, without any cumbersome paperwork or the need to open an IRA.
• Simplification. By eliminating the 16 different IRA type accounts and replacing them with a Universal Pension account, all Americans would get a good deal, not just the financially sophisticated or those who can afford an accountant or lawyer. Instead of 16 different sets of rules, there will be one set for everyone.
• Protecting Worker Savings. Universal Pensions will help to protect worker savings from future Enron's. After their 401(k) benefits become vested, employees could choose to transfer portions of their pensions from the control of their company into their UP, to be controlled solely by the individual investor. In addition, UPs, unlike IRAs, would be protected from bankruptcy proceedings.

"With this plan Americans will never have to fill out another 401(k) rollover form, and parents will not be discouraged from fulfilling their most important responsibility -- the care of their children," said Weinstein.

For additional information, Web users may access The Progressive Policy Institute Online, at www.ppionline.org, or contact PPI's communications office at (202) 547-0001.