Whereas, while most CFT members have access to a defined benefit pension through CalSTRS and/or CalPERS, and many of our members are also participating in Social Security; and

Whereas, the Old Age, Survivors, and Disability Insurance (OASDI) program, often called Social Security, is the most extensive income maintenance program in the United States which provides monthly compensation to partially substitute for income lost due to retirement, disability, or death; and

Whereas, this insurance program provides a guaranteed lifetime benefit based on the average, inflation adjusted income earned over a 35-year working life; and

Whereas, OASDI benefits provide the sole source of income for 28% of those over the age of 65 and majority of the income of 51% of retirees; and

Whereas, with these benefits, 10.2% of those over the age of 65 live below the poverty line, while without these benefits, 38.7% of those over the age of 65 would have incomes below the poverty line, and the poverty rates for women and people of color would be even higher; and

Whereas, for most of its history, the program was a purely pay-as-you-go (PAYGO) system, in which the contributions made by those still working are used to pay for benefits of those who are retired; and

Whereas, in 1983, OASDI taxes were increased to build up a trust fund to prepare for the retirement of the baby-boom population bulge and the baby-boom generation became the first generation to not only pay for the benefits of prior generations, but also to pre-fund their own retirement benefits; and

Whereas, starting in 2021, the trust fund has been used as intended, that is, to fund Baby-boom retirements by selling the assets included in the fund; and

Whereas, if no changes are made, the Social Security trust fund is projected to be depleted by 2035, at which point the system will revert back to purely PAYGO, at which point it will be able to pay 83% of promised benefits; and

Whereas, the easiest solution to ensuring the trust fund not being depleted would be to eliminate the cap on earnings subject to the payroll tax, which in 2025 was $176,000; and

Whereas, since its inception in 1935, the Social Security system has been under almost constant attack by conservatives and the right-wing; and

Whereas, one of the strategies used in these attacks involves “privatizing” the system by converting it from a guaranteed defined benefit pension system, managed by the Social Security Administration, into a system of individual defined contribution savings accounts, managed by Wall Street banks and other financial institutions; and

Whereas, the administrative costs of the current Social Security system are less than 0.5% of contributions and the administrative costs of individual defined contribution savings accounts can be as high as 20%; and

Whereas, the creation of these individual accounts would mean a windfall of billions of dollars of new profits for Wall Street firms; and

Whereas, in the private sector, the conversion of defined benefit pensions to defined contribution savings accounts by large corporations has left millions of retirees with inadequate and insecure retirement incomes, and has contributed to the rapid increase in income inequality among the elderly; and

Whereas, in the 1980s, both The United Kingdom and Chile converted their public defined benefit pensions to private savings accounts and in both countries, which increased the number of elderly living in poverty; and

Whereas, Project 2025 has called for the payroll taxes of all workers under the age of 30 to be put into individual savings accounts, which would make these workers ineligible to receive guaranteed retirement benefits when they retire; and

Whereas, Elon Musk, who is overseeing the Department on Government Efficiency (DOGE), has expressed strong support for privatizing Social Security; and

Whereas, diverting payroll taxes to private accounts would reduce the revenue used to cover PAYGO benefits, which would increase the reliance on using assets in the trust fund, which would deplete the trust fund earlier than 2035; and

Whereas, the right-wing has used the depletion of the trust fund as a fear tactic to claim that the system will be “bankrupt,” when in fact it will continue to be able to pay 83% of promised benefits, as an argument to dismantle Social Security completely;

Therefore, be it resolved, that CFT will oppose any efforts to “privatize” Social Security; and

Be it finally resolved, that CFT supports efforts to increase the revenue going into the Social Security system, but especially, by removing the cap on earnings subject to the OASDI tax and making all forms of employee compensation, including wages, salaries, stock options, and investment incomes subject to the tax

Submitted by the Retirement Policy Committee