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KFC Opens In Indea
David C. Novak, chief executive officer of Yum! Brands Inc., speaks during an interview after the opening of the company's new KFC restaurant in Calangute, Goa, India, on Tuesday, Oct. 22, 2013.
Bloomberg via Getty Images

Most fast food workers do not earn enough to retire with much of a pension. Then there is David Novak, executive chairman of YUM Brands, the conglomerate that runs Taco Bell, Pizza Hut, and KFC outlets. Novak's total retirement holdings, including deferred compensation, are worth $234 million - more than any other Fortune 500 chief executive.

Novak tops the list of Fortune 500 CEOs with the largest retirement nest eggs, according to a study from two progressive think tanks - the Center for Effective Government and the Institute for Policy Studies.

Their data comes from Security & Exchange Commission filings for the 500 largest public companies. The figures are stunning and cast a harsh and troubling light on soaring retirement inequality. The report offers yet another indication that runaway income inequality is producing grossly unfair retirement outcomes.

The top CEO retirement accounts are worth a combined $4.9 billion - equal to the total retirement account savings of the 41% of all American households with the lowest retirement wealth, according to the study. Among all Fortune 500 CEOs, the typical value is $17.7 million. That includes the present value of defined benefit pensions, 401(k) account balances and other deferred compensation. John Hammergren, CEO of drug wholesaler McKesson -- which froze its employee pension fund in 1996 -- has the largest Fortune 500 pension account, valued at $114 million. McKesson declined to comment. A spokeswoman for YUM noted its stock appreciated 900% during Novak's tenure.

The Rest of Us

The CEO numbers are a stark contrast to the rest of us. In 2013, pre-retirement households (age 55-64) with annual income below $39,000 had median total retirement savings of $13,000 in 401(k) and IRA accounts, according to the Center for Retirement Research. Middle-class households (income from $61,000 to $100,000) had median savings of $100,000. Only in the highest-income band ($138,000 or more) were accumulations significant, at a median of $452,000.

Changes in our retirement benefit structure play a big role in account balances -- especially the sharp decline in the share of private-sector workers receiving traditional defined benefit pensions. In the past decade, 54 Fortune 500 companies changed their defined benefit pension plans, according to the Pension Rights Center - either reducing benefits, freezing plans or closing them to new hires, or terminating them altogether.

"Growth in CEO pay itself is one factor, along with the shift of employees out of defined benefit plans to less costly 401(k) plans, which have less risk for the employer," says Scott Klinger, director of revenue and spending policies at the Center for Effective Government and co-author of the report.

The growing mountain of evidence on retirement inequality is adding to momentum to change national retirement policies in favor of middle and lower-income households. The starting point should be an expansion of Social Security to boost benefits for middle- and lower-income workers, an idea embraced by people like Democratic presidential candidate Bernie Sanders. Nothing else would have a broader, bigger impact.

Beyond that, we need to make access to workplace retirement saving universal. The Obama administration's recent move to clear the path for states to create their own universal auto-IRA plans is a good start. The financial services industry opposes these programs on ideological grounds - mainly because they are seen as government mandates.

Mandatory Saving

Even so, opposition is loosening a bit. That was clear in a remarkable speech this month by Tony James, president of Blackstone - one of the world's largest private equity firms. James issued a call for a universal, mandatory system of saving for all workers who do not currently have access to a workplace plan.

Specifically, he endorsed the Guaranteed Retirement Account (GRA), which is the brainchild of Teresa Ghilarducci, a labor economist at the New School for Social Research in New York City. The GRA calls for mandatory worker and employer contributions to a low-cost, professionally managed account.

"There is really no alternative; it has to be mandated," James said. "I know that can be a politically loaded word these days, but I assure you that nothing short of a mandate will provide future generations of Americans enough income for a secure retirement."

Blackstone is not run by fire-breathing liberals. Its founders are deficit-hawk-in-chief Peter Peterson and Stephen Schwarzman, who several years ago infamously compared an Obama plan to raise taxes on carried interest taxes to the 1939 Nazi invasion of Poland. Even Ghilarducci thinks positive movement might be coming. "I never thought 25 years ago we'd be talking about Social Security expansion - but here we are."

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