We’ve all discussed income inequality, the wage gap in the United States and how the scales seemed to be tipped in favor of the “1%,â€ but a report by the Center for Effective Government and the Institute for Policy Studies finds that when you look at the retirement assets of America’s top 100 CEOs, gaps become chasms, largely due to special perks that are off limits to those who need them most.
The data finds that just 100 CEOs have as much in their company retirement assets Â — a combined $4.9 billion — as the entire retirement savings of more than 40% of American families. That $4.9 billion translates into $277,686 a month, startling when you consider that about half of Americans don’t have retirement savings and those who do have enough saved to generate $310 a month, according to the Government Accountability Office.
Researchers also point out that just 18% of private sector workers are covered by a defined pension which guarantees monthly payments in 2014, and that nearly half of Americans have no access to retirement plans at work.
“The CEOs’ extraordinary nest eggs are not the result of extraordinary performance,â€ notes Scott Klinger, director of Revenue and Spending Policies at the Center for Effective Government. “They are the result of rules intentionally tipped to reward those already on the highest rungs of the ladder.â€
- Fortune 500 CEOs have $3.2 billion in special tax-deferred compensation accounts that are exempt from the annual contribution limits imposed on ordinary 401(k)’s.
- In 2014, these CEOs saved $78 million on their tax bills by putting $197 million more in these 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.
The data also suggests that the gender and race gaps persist even among the retirement assets of the top CEOs:
- The 10 largest CEO retirement funds–all held by white males–add up to $1.4 billion, compared to $280 million for the 10 largest held by female CEOs, and $196 million for the 10 largest held by CEOs who are people of color.
- Among ordinary Americans, 62% of working age African Americans and 69% of Latinos have no retirement savings, compared to just 37% of white workers.
“The CEO-worker retirement divide has turned our country’s already extreme income divide into an even wider economic chasm,â€ says Sarah Anderson, Institute for Policy Studies Global Economy Project director. “And what few realize is that the trends of expanding CEO pensions and increasing worker retirement insecurity are inextricably linked.â€