Washington, D.C. – As fewer Americans accumulate sufficient savings and the solvency of Social Security is threatened, how Americans adequately prepare for retirement has become a critical question. To address this long-term challenge, the Bipartisan Policy Center (BPC) today announced the launch of a new Personal Savings Initiative led by former Senate Budget Committee Chairman Kent Conrad, a Democrat, and Jim Lockhart, former Deputy Commissioner of the Social Security Administration under President George W. Bush.
Millions of Americans are approaching retirement with insufficient savings to maintain their current standard of living. Currently half of all American households nearing retirement age have less than $12,000 in retirement accounts. As defined benefit pensions become less common, and retirees are increasingly relying on a combination of defined contribution savings arrangements and Social Security benefits, many individuals are not saving enough in these vehicles or are not properly investing their contributions.
At a press conference today in Washington, the initiative co-chairs emphasized the critical nature of this issue. “Fundamental changes to federal and private retirement plans have made saving for retirement more complicated and less certain,” Senator Conrad noted. “Changes in private companies’ retirement plans, complex federal laws and lack of retirement education mean that only 46 percent of all workers reported having access to a workplace retirement savings plan, and only 38 percent were currently contributing, according to a study by the Employee Benefit Research Institute. The Bipartisan Policy Center’s Personal Savings Initiative will devise specific recommendations to begin to remedy these shortcomings.”
Over the course of the next year, the initiative will craft a package of realistic policy recommendations to address the future savings needs of Americans and will model the recommendations’ impact on retirement security and the federal budget. The final recommendations will be released in early 2015.
In the coming months, the initiative 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, student loan debt and savings.
BPC’s Personal Savings Initiative will examine the following key issues: federal policies that encourage and discourage savings, including the tax code; the pending insolvency of Social Security’s disability insurance; the interaction between Social Security and private savings, including defined benefit and defined contribution plans; and the impact of long-term care needs on retirement security and housing as a form of savings.
“Social Security plays a central role in retirement. For the elderly in the lower half of income levels, Social Security makes up 85 percent of retirement income,” Lockhart said at today’s launch. “Researchers across the political spectrum have come to the same conclusions – a significant portion of Americans are on track to have a lower standard of living than they do now and many of these households risk running short of money for basic necessities, like health care and housing.”
Today the co-chairs unveiled the highly knowledgeable and respected commissioners who will support this effort. The group includes a broad range of political and industry perspectives, including financial experts, business leaders, former elected officials, academics and other key stakeholders. See the full list of commission members below. The group will meet for the first time in June.
Members of the Personal Savings Initiative
Former Senator from North Dakota
Former Chairman, Senate Budget Committee
Former Member, Senate Committee on Finance
James B. Lockhart III
Vice Chairman, WL Ross & Co. LLC
Former Deputy Commissioner, Social Security Administration
Former Executive Director, Pension Benefit Guaranty Corporation
Todd F. Barth
President, Bowers Properties Inc.
Board Member, Texas Teacher Retirement System
Former Senator from New Mexico
Former Chairman, Senate Committee on Energy and Natural Resources
Former Member, Senate Committee on Finance and Senate Committee on Health, Education, Labor, and Pensions (HELP)
Charles P. Blahous III, Ph.D.
Public Trustee of Social Security/ Medicare
Research Fellow, Mercatus Center and Hoover Institution
James H. Douglas
Former Governor of Vermont
Executive in Resident, Middlebury College
Member, BPC’s Governors’ Council
Former Representative from California
Former Chairman, House Rules Committee
Chairman, Annenberg-Dreier Commission
Gail D. Fosler
President, GailFosler Group LLC
Former President and Chief Economist, Conference Board
William G. Gale, Ph.D.
Co-Director, Urban-Brookings Tax Policy Center
Director, Retirement Security Project
Senior Fellow, Economic Studies
Professor, Bernard L. and Irene Schwartz Chair in Economic Policy Analysis, The New School
Director, Schwartz Center for Economic Policy Analysis (SCEPA), The New School
C. Robert Henrikson
Former Chairman of the Board, President and CEO, MetLife, Inc.
Brigitte C. Madrian, Ph.D.
Aetna Professor of Public Policy and Corporate Management, Harvard University
Executive Director, Initiative on Financial Security, The Aspen Institute
Robert D. Reischauer, Ph.D.
Former Director, Congressional Budget Office
Public Trustee of Social Security/Medicare
Distinguished Institute Fellow and President Emeritus, The Urban Institute
Former Legislative Director, United Auto Workers
President and CEO, Employee Benefit Research Institute
Sylvester J. Schieber, Ph.D.
Former Chairman, Social Security Advisory Board
Independent Pensions Consultant
Antonio R. Villaraigosa
Former Mayor of Los Angeles
Senior Fellow, BPC