Burdened by stagnant wages and shrinking employer benefits, average Americans are struggling to put aside enough for retirement.
But rest assured, there is one group that has no such worries — America’s top executives. In fact, they enjoy lavish pensions that would otherwise support millions of ordinary workers, according to a new report released this week by the Center for Effective Government and the Institute for Policy Studies.
Combined, the 100 largest chief executive retirement funds are worth $4.9 billion, which is about equal to the entire retirement account savings of 41 percent of American families. On average, these CEOs have enough assets salted away to each generate a monthly retirement check of over $277,000, according to the report.
If that’s not enough, many Fortune 500 chief executives further pad their platinum-lined nest eggs through prudent use of the nation’s tax laws, which many activists say contribute to inequality in retirement savings. The report said these executives managed to stash $3.2 billion in special tax-deferred accounts that circumvent the annual contribution limits that govern ordinary 401(k)s. By doing that, the report said, the Fortune 500 chief executives saved $78 million in taxes.
Top executives can look forward to opulent retirements, even while many workers, particularly minorities, will struggle to make ends meet. The report said 62 percent of working-age African Americans and 69 percent of Latinos have no retirement savings. Meanwhile, 37 percent of whites also have nothing set aside for retirement, leaving them heavily reliant on Social Security.
Overall, nearly half of all workers have no access to any retirement plan at work, and 29 percent of workers between ages 50 and 64 have neither pensions nor retirement savings.
The report says policy makers should look at ways to close the imbalance. Among the ideas:
• End unlimited tax-deferred compensation for executives.
• Cap tax-deferred corporate-sponsored retirement accounts at $3 million.
• Eliminate tax breaks for companies that have pension plans and other retirement benefits for workers.
• Expand Social Security.
“These massive nest eggs are not the results of CEOs working harder or investing more wisely,” the report said. “They are the result of rules intentionally tipped to reward those already on the highest rungs of the ladder.”