The Commission on Retirement Security and Personal Savings will examine whether savings rates and available savings vehicles are meeting the retirement goals of Americans and the nation’s investment needs. The initiative will formulate innovative recommendations to increase national savings, improve income security in retirement, and guard against the potential costs of long-term care and loss of income due to disability.
Defined benefit pensions are becoming less common, and retirees are increasingly relying on a combination of defined contribution savings arrangements and Social Security benefits. Many individuals, however, do not have access to payroll-deduction savings plans in the workplace, are not saving enough in these vehicles, or are not properly investing contributions. As a result, millions of Americans may be approaching retirement with inadequate savings to maintain their standards of living.
The core of the initiative will be recommendations to streamline and improve the defined contribution retirement system by increasing personal savings for retirement and improving the effectiveness of tax-advantaged savings vehicles.
The initiative will address important financial security issues, including, but not limited to:
- The impact of federal policies on private savings. Federal law, including the tax code, has dozens of provisions to encourage saving for retirement and other purposes, as well as others that provide a disincentive to save. The initiative will recommend policy changes to increase savings and retirement security, improve consumer protection, and reduce administrative burden for employers.
- The finances and operation of Social Security Disability Insurance and its interaction with private disability insurance. The program, which provides near-universal protection against loss of income due to disability for working Americans, is on course for insolvency in 2016.
- Interaction of Social Security with personal savings, especially those in tax-advantaged retirement savings vehicles. Viewing either Social Security or private savings in isolation leads to an incomplete picture of retirement readiness.
- The impact of long-term care needs on retirement security. Even for those who have an adequate retirement income, securing it from potential costs related to long-term care can be a daunting task.
- The role of homeownership and student debt. Home equity can be an important source of retirement security, but student debt may be impeding home purchases and other savings among young Americans.
Leaders and Commission
Senator Conrad represented North Dakota in the United States Senate for 26 years and served as the chairman or ranking Democrat on the Senate Budget Committee for 12 years. Lockhart was appointed by President George W. Bush as deputy commissioner and chief operating officer of the Social Security Administration and later as director and chairman of the Oversight Board of the Federal Housing Finance Agency. He previously served as the executive director of the Pension Benefit Guarantee Corporation.
The co-chairs will be joined on the commission by a mix of former public officials and nationally recognized experts in savings and insurance.
During 2014, the commission will hold roundtables and issue a series of white papers highlighting challenges related to retirement savings, defined contribution accounts, annuities, Social Security Disability Insurance, and the intersection among housing, higher-education debt, and savings. The commission will develop a set of policy recommendations and model their impact on personal savings, retirement readiness, the macro economy and the federal budget to be presented in a final report in early 2015.
Many Americans are anxious about their retirement prospects. In fact, a recent Gallup poll found that not having enough money for retirement is the number one financial worry among Americans. For some, this concern is justified, as they face the daunting prospect of running short of money in their later years. But there is considerable variation in preparedness for retirement, and the challenges are more complicated than many realize.
Retirement Security: What’s Working and What’s Not?
July 30, 2014
Launch of the Personal Savings Initiative
April 23, 2014
Needing Help: Long-Term Care Risk
October 14, 2014
New Staff Paper Focuses on Diversity in Retirement Preparedness
October 7, 2014
Outliving Your Savings: Longevity Risk
September 29, 2014
U.S. Senate Committee on Finance Holds Hearing on Retirement Savings Reform
September 24, 2014
Leakage: Taking the Money Too Early
September 19, 2014
The Impact of Automatic Features in Defined Contribution Plans
September 11, 2014
Defined Contribution Retirement Accounts: The New Normal
August 20, 2014
Households near retirement don’t have enough savings
June 17, 2014
A Shift to Defined Contribution Retirement Plans
June 10, 2014
Americans are not prepared for financial emergencies
June 3, 2014
Americans are saving less than we used to
May 27, 2014
Why is BPC Launching a Personal Savings Initiative?
April 22, 2014
U.K. Budget Proposes Pension and Savings Changes
April 10, 2014
In the News
Retirement Savings Fears Grip Americans: “I Don’t Have Enough"
The Fiscal Times
June 9, 2014
Former Sen. Conrad comes out of retirement to focus on retirement savings
April 23, 2014
Policy group dives into retirement savings
April 23, 2014
Bipartisan Fix To Retirement Crisis In 2015?
April 23, 2014