Former Senator Kent Conrad and Jim Lockhart, co-chairs of the Bipartisan Policy Center’s Commission on Retirement Security and Personal Savings, testified on Wednesday before the Senate Special Committee on Aging. They discussed the commission’s recommendations for increasing retirement savings, reducing old-age poverty, and strengthening Social Security. In their testimony, Conrad and Lockhart highlighted the potential benefits that the report’s recommendations would have for millions of Americans as they save for retirement.
The co-chairs testified that, taken together, these recommendations would increase retirement savings by 50 percent for middle-class Americans and reduce old-age poverty by one-third, lifting over one million older Americans out of poverty.
Less than half of private-sector workers are currently contributing to a workplace retirement savings plan and one-third don’t have access at all.
“It starts by expanding access to workplace retirement savings plans,” Conrad said in his testimony. “Less than half of private-sector workers are currently contributing to a workplace retirement savings plan…[and] one-third don’t have access at all.” The commission recommends creating new “Retirement Security Plans,” which would allow employers with less than 500 employees to band together to form low-cost, well-run retirement savings plans.
In addition to making it easier to save, the commission’s recommendations also disincentivize taking out retirement savings and home equity during working years, encourage plan sponsors to offer tools to help savers turn their savings into lifetime income, and promote financial capability so that Americans have the necessary knowledge and ability to manage their own finances.
The co-chairs also discussed the commission’s proposals to make Social Security fiscally sound and to avoid across-the-board cuts that are set to occur in 2034. Lockhart explained that the package of recommendations is roughly evenly balanced between revenue increases and benefit savings. If implemented as a whole, the reforms would improve benefit adequacy and make Social Security fiscally sound for the next 75 years and beyond.
Claire: While I don’t agree w/ everything, this BPC report is impressive.
— McCaskill Office (@McCaskillOffice) September 7, 2016
The 19 members of the BPC commission came from diverse backgrounds and represented the full political spectrum, participating in a two-and-a-half-year process of deliberation and compromise. The final product was a comprehensive, bipartisan package of recommendations aimed at addressing the most pressing challenges facing millions of Americans as they save for their retirement.
“Reaching consensus was a difficult process and nobody got everything they wanted. But, we believe these recommendations should garner broad bipartisan support and improve retirement security for all Americans,” Lockhart said.
Aging Committee Chairman Susan Collins (R-ME) echoed Lockhart’s sentiment, noting that while she did not agree with every single one of the commission’s ideas, she commended them for putting together “a thoughtful, comprehensive, and extraordinarily valuable report.”
“The fact is that Congress cannot continue to shy away from tackling these critical issues, given the scope of the problem and the impact on an increasing number of Americans,” Collins said. “Neither party has a monopoly on good ideas to address this crisis. What the Center has done is bring together both sides in a comprehensive report.”
“Reaching consensus was a difficult process and nobody got everything they wanted. But, we believe these recommendations should garner broad bipartisan support…,” Lockhart said.
“It would be terrific to see the hard work of this commission rewarded by the work of Congress to come together to find common ground to protect seniors,” added Sen. Claire McCaskill (D-MO), the ranking member on the committee.
The Aging Committee is to be commended for focusing on these critical issues of personal savings and retirement security. With more than 10,000 older Americans transitioning into retirement every day, the need for action is great. Hopefully this hearing represents the first of many opportunities for lawmakers to examine and pursue ways to implement the commission’s recommendations.