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Pioneer Editorial: Shoring up options for retirement

The nation's pension programs will be shored up as President Bush on Thursday signed new rules to prevent corporations from shorting their pension funds, and having them end up at taxpayers' doorstep.

"Americans who spend a lifetime working hard should be confident that their pensions will be there when they retire," Bush said in signing the new law.

A sign of the times has seen private pension funds floundering, leaving long-time workers who depend upon their pension in retirement. The federal govern-ment is a fall-back for bankrupt pension funds, but only at cents on the dollar.

The legislation Bush signed Thursday requires companies with defined-benefit plans to ensure that they set aside enough money to pay for their retirees. Those plans now nationally are underfunded by an estimated $450 billion. Companies seriously underfunded must contribute at a faster rate and face certain restrictions, such as a ban on increasing benefits. The new law also requires companies to tell workers more about the health of their pension programs.

It also tries to point workers into another option for retirement savings, that of putting their own money away for retirement. Many companies today have moved away from defined-benefit programs to such shared programs as a 401(k)s, where the employee and employer set aside funds which are invested, or in IRAs. Such defined-contribution savings plans are becoming increasingly more important as retirement savings vehicles.

The new law allows workers to contribute more to their personal retirement savings accounts, and employers can now automat-ically enroll them in 401(k) retirement accounts. And financial firms will get greater flexibility to offer advice to those 401(k) and IRA savers on how best to invest.

While the new law does much to strengthen pensions and to widen opportunities for self investment through 401(k) and IRA savings accounts, a third leg still needs shoring up for those who don't work at a company large enough to have pension funds or don't make enough money to divert large sums to retirement savings accounts.

For those workers, their wages are automatically deducted and put into Uncle Sam's Retirement Account -- Social Security.

Unfortunately, Social Security has been bantered about as a political football for years, and the day will soon come when a surplus will become a deep deficit and it will be unable to pay retirement benefits. The program this week is celebrating its 71st anniversary of providing guaranteed benefits. Bush is indicating that he wants to renew his efforts to privatize the fund, sending $721 billion over the next 10 years from the Social Security Trust Fund to pri-vate accounts, the same pitch which was rejected by the American people in 2005.

Social Security provides an important third leg to the stool with pension and private accounts, and should remain a stable, guaranteed fund and not put at risk of having guaranteed benefits cut or increasing the national debt by $1 trillion, as some experts believe.