More than half of states – who may well face the eventual challenge of impoverished retirees – have proposed a variety of measures to mandate coverage, create exchanges, and otherwise facilitate retirement savings (via payroll deduct) for these workers. The Federal government has made an attempt, as well, with the introduction of an optional “MyRA” program; uptake has been lukewarm at best, though, with approximately 20,000 people opting to participate.
How do workers themselves feel about retirement savings, saving via the workplace, common features of retirement programs, and the qualifications of institutions jockeying to administer such programs?
Workers understand that they need to save for retirement, they want to do it through their workplaces, and they support employers’ being required to offer workplace savings plans. There are several aspects or features of the defined contribution (DC) system that workers do highly value, such as comparatively higher contribution limits (versus IRAs), employer contributions and “best interest” investment selection. Workers’ confidence in entities to administer programs, however, varies widely, and while they support government plan mandates, their confidence in government entities’ ability to administer such programs is low.
There is a role for the DC industry to play in solving the issue of worksite retirement plan access… building upon an infrastructure that is appealing to workers, and enabling even the smallest of employers to easily and affordably (with some fiduciary protection) offer robust and meaningful workplace retirement savings solutions.