While these priorities remain, much has changed, particularly in recent years. No doubt you have taken a look at your 401(k) statement or health care bills recently and can see some of the changes for yourself. Over 30 percent of Americans who are on the verge of retirement and have been socking away savings for 20 years or more have not seen their 401(k)s recover fully from the economic downturn.
This at a time when more and more people are relying on 401(k) accounts as a primary retirement savings vehicle. In contrast to the defined benefit pensions many Americans used to receive, our current retirement system has transferred the responsibility for retirement savings and risk from employer to employee. This means that individuals must make several proactive decisions, including the decision to save, how much to save, how to invest and how to make their savings last through retirement.
But even those lucky enough to have earned a pension are vulnerable. In Wisconsin, I have seen the devastation of plants closing and pension plans crumbling. Now more than ever, it is vital that we shore up the nation's system of individual retirement savings. Last year, the Senate Special Committee on Aging ensured that 401(k) account fees be clearly disclosed to consumers on quarterly statements. Before that, investment firms were not required to disclose the fees workers were paying. Here's the impact: An additional 1 percent fee can reduce a worker's 401(k) balance by as much as 20 percent over a two-decade period, according to Government Accountability Office calculations.
We will also work to close 401(k) loopholes and will tackle individual retirement accounts, which make up the largest portion of the retirement market, and explore ways to make it easier for small businesses to offer retirement savings plans to their employees.
The committee's priorities for health care and long-term care likely mirror your own. We understand that Americans want to remain independent, and in their own homes, as long as possible. Seniors want access to quality health care, and they do not want the costs to force them into financial ruin. We will continue our aggressive efforts to reduce prescription drug costs and increase access to affordable generics. We will address the outrageous rate hikes that consumers have experienced at the hands of both health insurance and long-term care insurance companies. And we will be bold when necessary, as we were when we held up confirmation of the chief of the Drug Enforcement Administration to pressure the agency into allowing readier access to painkilling medicine for nursing home residents.
As the first boomers hit 65 this year, the Aging Committee is ready. Your priorities are our agenda. Despite all the changes taking place around us, our mandate remains the same: to help Americans achieve the secure, healthy and comfortable retirement they deserve.
Herb Kohl is a Democratic senator from Wisconsin and chairman of the Senate Special Committee on Aging.