Changing the rules that allow platinum pensions for CEOs and retirement insecurity for the rest of us.

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This report is a “Tale of Two Retirements”: one for CEOs of large U.S. corporations and the other for the rest of us.


Retirement benefits for CEOs at corporations have exploded while the rest of Americans struggle to save for retirement.

Just look at this statistic: the 100 largest CEO retirement funds are worth a combined $4.9 billion. That’s equal to the entire retirement account savings of 41 percent of American families!

This rising inequality is the result of rules intentionally tipped to reward those already on the highest rungs of the ladder.

While the availability of pension plans for most Americans has dwindled in the last 30 years, more than half of Fortune 500 CEOs receive company-sponsored pension plans. Their firms are allowed to deduct the cost of these plans from their taxes, even if they have cut worker pensions or never offered them at all.

Seventy-three percent of Fortune 500 firms have also set up special tax-deferred compensation accounts for their executives. These are similar to the 401(k) plans that some Americans receive through their employers. But ordinary workers face strict limits on how much pre-tax income they can invest each year in these plans, while top executives do not. These privileged few are free to shelter unlimited amounts of compensation in their retirement pots, where their money can grow, tax-free, until they retire and start spending it.

The CEO-worker retirement divide turns our country’s already extreme income divide into an even wider economic chasm.

New analysis by the Government Accountability Office shows that 29 percent of workers approaching retirement (aged 50-65) have neither a pension nor retirement savings in a 401(k) or Individual Retirement Account (IRA).

According to a study by the Schwartz Center for Economic Policy Research at the New School, 55 percent of those aged 50-64 will be forced to rely almost solely on Social Security (which averages $1,233 a month).

Younger Americans face a particularly difficult time saving for retirement. More than half of millennials have not yet begun to save for retirement, as they lack access to good jobs, and have staggering amounts of student loan debt. Americans under 40 today have saved 7 percent less for retirement than people in that age group were able to save in 1983.

The lavish retirement packages for executives and growing retirement insecurity for the rest of us are inextricably linked. The rules now in place create powerful incentives to slash worker retirement benefits as a way of boosting corporate profits and stock prices. And since more than half of executive compensation is tied to the company’s stock price, every dollar not spent on employee retirement security is money in the CEO’s pocket.

Despite these grim findings, it's clear that we can rewrite the rules that have been rigged against the middle class for the last 30 years. Together, we can change this and allow for all Americans to be able to retire with dignity.


"The CEOs’ extraordinary nest eggs are not the result of extraordinary performance. They are the result of rules intentionally tipped to reward those already on the highest rungs of the ladder."

- Scott Klinger, Center for Effective Government

Our Report Findings:

  • The 100 largest CEO retirement funds are worth a combined $4.9 billion. That’s equal to the entire retirement account savings of 41 percent of American families (more than 50 million families).

  • YUM Brands former CEO David Novak is sitting on the largest retirement nest egg in the Fortune 500, with $234 million, while hundreds of thousands of his Taco Bell, Pizza Hut, and KFC employees have no company retirement assets whatsoever.

  • The top 10 largest CEO retirement funds—all held by white males—add up to $1.4 billion, compared to $277 million for the 10 largest retirement funds held by female CEOs, and $196 million for the 10 largest held by CEOs who are people of color.

  • Fortune 500 CEOs saved $78 million on their 2014 tax bills by putting $197 million more in special tax-deferred accounts than they could have if they were subject to the same rules as other workers. These special accounts grow tax-free until the executives retire and begin to withdraw the funds.

  • Nearly half of all working age Americans have no access to any retirement plan at work. The median balance in a 401(k) plan at the end of 2013 was $18,433, enough to generate a monthly retirement check of $104.

Rewriting the Rules:

The retirement divide is not the result of natural law, but rather the rules established that disproportionately reward company executives far more than ordinary workers.

Throughout history, Americans have come together and written rules that help everyone. We can do this again.

The following are rule changes to rein in the accumulation of retirement assets at the top, while expanding the funds available to ensure a dignified retirement for all.

  1. End unlimited tax-deferred compensation for corporate executives. Corporate executives should be subject to the same rules that govern the retirement assets of the people they employ. At present older workers may set aside $24,000 in their corporate 401(k) accounts; younger workers, $18,000. The same limits should apply to CEOs.

  2. Cap tax-deferred corporate-sponsored retirement accounts at $3 million. In 2013, President Obama proposed capping IRAs and other deferred tax retirement accounts at $3 million, an amount sufficient to generate about $200,000 a year in annual income during retirement. The President estimated such a cap would raise an additional $9 billion of tax revenue over 10 years. We support establishing an annual excise tax on assets greater than $3 million, the funds from which will go to the Social Security Trust Fund for the benefit of all workers.

  3. Eliminate tax breaks for companies that increase worker retirement insecurity. Taxpayers should not have to subsidize lavish executive retirement packages for employers who have reduced employee retirement security. Corporations should not be allowed to deduct executive pension and retirement costs from their federal taxes if they have frozen worker pensions, closed plans to new hires, or have employee pension accounts that are not at least 90 percent funded.

  4. Prohibit large government contractors from providing executives with retirement benefits that are larger than those received by the President of the United States.

  5. Expand Social Security and require CEOs to pay their fair share. Some common sense steps to pay for Social Security expansion fairly include raising the cap on wages subject to Social Security payroll taxes (currently only $118,500 of income is subject to Social Security tax) and extending the tax to stock-based pay such as that commonly received by CEOs.

  6. Safeguard public pensions. The public sector is the one sector where traditional defined benefit pension plans remain strong. More than 75 percent of state and local employees and nearly all federal employees participate in these plans. But these plans are under sustained, ideological assault.

  7. Strengthen the ability of all workers to unionize. In 1983, 21.6 percent of workers were members of unions. Today, it is only 12.4 percent—and half of those work in the public sector. Only 6.7 percent of today’s private sector workers are unionized. The highest percentage of workers covered by private pensions is higher when and where unions were strongest. Increasing unionization increases pressure on employers to provide strong retirement benefits.

  8. Support universal retirement funds. Twenty states have considered legislation that would deal with the looming retirement crisis facing their citizens by starting state-run pensions that would be professionally managed and at much lower costs than the mutual fund investments typically found in 401(k) plans. Employers that are currently not providing retirement benefits should be required to contribute to a retirement fund on their workers’ behalf.

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