In a new viewpoint white paper, “Roadmap for Improving U.S. Retirement Savings: Make it Easier,” BlackRock lays out several measures that would improve the retirement outlook for millions of Americans.
The first measure is to expand access to employer-sponsored retirement plans. BlackRock says that this could be achieved by encouraging open multiple employer plans (MEPs) by eliminating the “nexus” requirement that they be in related industries. The firm says the “one bad apple” rule should also be eliminated.
Secondly, BlackRock says the government could reduce reporting and disclosure requirements on plans, starting by simplifying Form 5500 and allowing electronic delivery of disclosures. Thirdly, the government should offer a modified SIMPLE individual retirement account (IRA) plan that small businesses could establish with low start-up and maintenance costs.
The second measure is to increase participation in retirement plans, starting by granting a safe harbor for re-enrollment into a qualified default investment alternative (QDIA). A new safe harbor for automatic enrollment and escalation could also be established, BlackRock says. Thirdly, by simplifying disclosures related to rollovers, this would improve portability of plan assets.
The third measure that BlackRock is calling for is to focus on decumulation by increasing access to lifetime income products, including annuities, in defined contribution (DC) plans. The government could also make it easier for people to move assets from a DC plan into an individual retirement account (IRA), and revisit minimum distribution rules for small DC and IRA balances.