Getting Americans on the Roads to Retirement

By Frances Denmark and Jeffrey H. Snyder

Roads2Retirement The Final Act: Philadelphia, NAGDCA and the Roads Less Traveled

In our final act, I make a quick stop at LinkedIn headquarters to visit with Senior Finance Editor Devin Banerjee and then I head off to Philadelphia. I stop at the National Association of Government Defined Contribution Administrators annual conference and then visit the folks at The Victor Cafe to talk about their business and how the staff balances working at the Cafe while pursuing their careers in opera. Check it out. Tomorrow, I'll wrap up my journey.

Roads2Retirement Act IV - CalSavers

The new CalSavers retirement plan came up during several of my recent conversations. What is this plan? I decided to head to the state capital in Sacramento for a sit down with California State Treasurer John Chiang to discuss the state of retirement savings in the United States and how California has chosen to address the issue. It's an enlightening discussion and the statistics he cited really caught me off guard. So many Americans, not saving! More than I thought. How will the plan work? I also sat down with Executive Director Katie Selenski to share some of the details. Tomorrow, a quick stop in San Francisco and then off to Philadelphia.

Roads2Retirement Act III - A Sacramento Gold Rush

I head north to Sacramento where I get the skinny on what businesses like Heritage One Door and Carpentry are doing with their 401k plans to help employees save for their financial futures. What are fiduciaries thinking? Geoff Hughes gives me the low down (and a tour of the facilities where I kinda felt like Bob Villa.) Darryl King is a young man who wants to save, and one of the reasons he recently joined Heritage One was because of their retirement benefits. And then I sat down with Janico Building Services president Lorenzo Harris and Principal Yolanda Harris to hear what these two community leaders had to say about assisting their staff with savings. These are some great conversations with some wonderful nuggets of information. Tomorrow, we head to the Capital.

Roads2Retirement Act II - Small Businesses in The Haight and a Look Back at 2008

I learned some great lessons and got some fresh perspectives from Shawn and Will. (And, we are two-for-two with dogs in our interviews.) Now it was off to San Francisco to experience that cultural gem, Haight Ashbury. I get a brief history lesson from brewer and malter (and Dead Head) Dave McLean, talked the challenges of running a small business with entrepreneur Christin Evans, and had an opportunity to reflect back on the experiences of the 2008 financial crisis with Camden Avery. Check out these stories and hear the passion for savings. Tomorrow, we're off to Sacramento.

Roads2Retirement: Act I The Journey Begins

After touching down in San Francisco, I set out on an adventure to uncover what Americans are thinking in terms of saving and planning for their financial futures. Using the back drop of Marin County and San Rafael, California, we meet Shawn, a striving artist and Will, a Menlo Park firefighter and EMT. Hear their stories.

Above: The Roads to Retirement is a new docuseries created by Jeffrey Snyder and Oct28 Productions that launches during National Retirement Security Week.

On a crowded October calendar that features commemorations ranging from National Chocolate Day (the 28th) to National Popcorn Popping Month, it is perhaps in even better taste that National Retirement Security Week sits squarely in the third week of the month.

Originally introduced in 2006 as National Save for Retirement Week by then-Senators Kent Conrad (D-ND) and Gordon Smith (R-OR), a special week in October was set aside to help build awareness of the need to participate in a retirement plan. The new designation was given a boost by the recently passed Pension Protection Act of 2006. The PPA gave employers the green light to auto-enroll their employees in a company-sponsored defined contribution retirement plan, and auto escalate their contributions, a giant step toward growing 401(k) assets.

In the dozen years since then, assets in workplace retirement plans such as the 401(k) have grown from $4.3 trillion at the end of 2006 to $7.8 trillion at the end of June 2018. While market growth, rather than new deposits, accounts for part of the increase, market participation is one of the key reasons tax-deferred retirement savings plans are preferred over, say, stashing pennies in a piggy bank.

 In the 12 years since the PPA’s inception, awareness of the need to increase retirement savings has expanded beyond nudging employees to set aside some of their earnings through employer-sponsored plans. While that is still a challenge where auto enrollment does not exist, the focus has increasingly turned to creating new savings vehicles for the approximately 50 million workers, or one third of the workforce, that have no access to a workplace plan.

Retirement security is not only a federal or state or financial industry issue. And it’s not just about individuals. It’s an American issue. The road to a successful retirement system in the United States will require collaboration by the government, the retirement industry and the American workforce.

“The single most important piece of unfinished business is to expand coverage,” notes Mark Iwry, a nonresident fellow at the Brookings Institution. That is, to cover “the one out of three working families that do not have an employer that sponsors a plan and that therefore have no ready access to workplace savings.” Workplace saving increases the likelihood a person will save by a factor of 15, according to AARP research.

In 2005 Iwry, who is also a visiting scholar at the Wharton School at the University of Pennsylvania, joined David John, then a senior research fellow at the Heritage Foundation, to design a new retirement plan called the Automatic IRA to fill the massive retirement savings gap. In 2008 John, now a senior strategic policy advisor at the AARP Public Policy Institute, was tapped to provide retirement strategy advice to John McCain’s presidential campaign, while Iwry worked with the Obama team.

The two retirement gurus are role models of the kind of bipartisan partnership that is needed to rationalize the U.S. retirement system. Across the country, on the state level (California, Illinois, Connecticut, Massachusetts, Maryland) various iterations of their Auto IRA design are rolling out or are in planning stages. These state-sponsored programs intend to cover, for example, the six million California employees currently without access to an employer-sponsored retirement plan.

 Other new retirement vehicles that would serve those outside the employer-sponsored system include the open multiple employer plan and the pooled employer plan, which are tantalizingly close to passage in Congress. Recently, President Trump signed an executive order giving his approval to these models.

What will it take to provide broader retirement savings? A plan approved by both the president and Congress, that would create a simple and easy means for employers to offer a retirement vehicle to their currently uncovered workforce. That would indeed be something to celebrate when next year’s National Retirement Security Week rolls around. Chocolate and popcorn, anyone?

Frances Denmark is an award-winning financial journalist with over two decades of experience covering retirement and pensions.

Jeffrey H. Snyder is the Founder and CEO of The Morning Pulse, an award-winning digital technology, media company and consulting firm focused on aggregating, organizing and delivering retirement and financial services industry information daily and weekly.