The panel, also referred to as the ERISA Advisory Council, included the presidential commission recommendation in a report that features a series of suggestions growing out of two public hearings conducted in July and September 2009.
The Council’s document stops short of calling for sweeping changes in the U.S. retirement savings system, saying instead that many changes will need to rest on formal government policy changes or Congressional legislation.
According to the report, the panel recommended formation of the presidential commission because the wide variety of suggestions it received about how to fix the current system’s problems convinced it of the need to formulate a new national approach to helping financially prepare Americans for their retirement.
“This (new) National Retirement Policy will need to consider the existing retirement structures offered by Social Security, employer provided benefits and retail (e.g., IRA) retirement vehicles as well as other economic factors that contribute directly to income security in retirement (e.g. retiree health care),” wrote panel members. “The policy also will need to focus on short-term and long-term objectives to achieve worker security.”
Other Council suggestions included:
- The Department of Labor (DoL) “should take leadership in developing workers who are financially literate by facilitating, coordinating and collaborating with other government agencies, interagency councils, the private sector, professional organizations and academia to leverage all available support for the need to address financial literacy including promoting financial literacy as part of elementary education.”
- The DoL should formally expand its scope to include not only the accumulation phase of retirement savings, but the decumulation as well. “Each of these phases taken individually, and then in the aggregate, must be considered to truly prepare all the stakeholders involved in retirement security,” the panel wrote. “The Presidential Commission must engage small, medium and large employers to encourage all employers to promote retirement security for their workers through all these phases. The policy needs to identify all available means, including when possible, increased use of electronic media, to encourage individual workers to understand and participate in retirement planning and security.”
- Labor Secretary Hilda L. Solis “should champion the maintenance and expansion of the defined benefit system by convening an interagency task force to review and revise the current burdensome regulatory regime and by charging the (Pension Benefit Guaranty Corporation) to develop initiatives to encourage the continuation, maintenance, and expansion of voluntary private defined benefit pension plans.”
- Regarding defined contribution plans, the DoL “should develop approaches to address participation disparities across racial, gender and ethnic groups. It should examine the role of race, gender and ethnicity on participation in voluntary plans to determine the best methods to ensure that diverse groups have equal opportunities to achieve retirement security.”
- The Council heard from nine witnesses at a July 21, 2009, hearing and 13 at a September 16 session. The panel was created by ERISA to render advice to the DoL secretary.
The panel’s report is available at www.dol.gov/ebsa/publications/2009ACreport1.html.