Support justice-driven, accurate and transparent news — make a quick donation to Truthout today!
Flo, the Progressive insurance pitch woman in the white uniform and headband, is relentlessly perky. She won’t be when she learns about the double standard that lets her CEO sock away millions more for retirement than she can.
Whereas the Flos of the working world face strict limits on how much they can set aside tax-free for their golden years, many of their bosses don’t.
Flo’s boss, Progressive CEO Glenn Renwick, dropped $26,170,569 last year into his deferred compensation account – that’s $26,152,569 more than Flo would’ve been allowed to invest in a 401(k).
Ordinary workers under 50 (like Flo) can contribute no more than $18,000 per year to a 401(k). But most big companies offer special accounts that allow their top brass to set aside unlimited amounts of their pay tax-free until they retire.
Renwick’s stockpiled more than $150 million in such an account during his more than two decades at the company. That’s enough to generate an $850,000 check every month for the rest of his life.
This double standard is just one reason the CEO-worker retirement gap is now even wider than the income divide.
A new report I co-authored for the Institute for Policy Studies and the Center for Effective Government finds that the company retirement assets of just 100 CEOs equals thecombined golden years savings of 50 million American families – or 41 percent of us.
On top of their special tax-deferred accounts, more than half of Fortune 500 chief executives get traditional pensions that guarantee a stable monthly payment after retirement. That kind of security has gone the way of the typewriter for most American workers.
To cut costs, most companies have shifted to riskier and less generous 401(k)-type plans – or eliminated retirement benefits altogether. As a result, more and more seniors have to rely on Social Security to avoid falling into poverty.
They’ll be hit hard by the government’s recent decision to provide no cost of living increase in Social Security in 2016.
In response, Senator Elizabeth Warren has introduced a bill that would offer a one-year, 3.9 percent bump in Social Security benefits. How would the Massachusetts Democrat pay for it? By eliminating a tax loophole that currently subsidizes excessive CEO pay.
There are many other ways to narrow the retirement divide so that all Americans can look forward to living in dignity in their later years. For one thing, corporate executives should be subject to the same rules that govern the retirement assets of the people they employ.
If Flo the perky pitch woman can’t put more than $18,000 per year in a tax-deferred account at Progressive, her boss shouldn’t either.
25 Years of Truthout: An important fundraising appeal
This September, Truthout is celebrating 25 years of publication. For over two decades, we have been a trusted source for fiercely independent journalism thanks to readers like you.
As we look to the next 25 years, we have launched a special fundraising campaign. This campaign is almost over! We have a goal to raise $18,000 before midnight tonight.
We are asking for your support at this juncture because we face greater threats than ever before in our organizational history. Trump and his MAGA allies are determined to control the information ecosystem, and movement-based organizations are subject to dangerous censorship and scrutiny.
If you can support Truthout with a one-time or monthly donation, you will make a significant impact on our work and our legacy. Anything you can do makes a difference!