Extend Workplace Savings to all Americans
May 11, 2009
I am sure that many people here and in our industry will have a variety of fresh ideas to improve what I’ve sketched out here today. But let me be very clear. Even if we make all the changes I’ve mentioned, there is much, much more to do in workplace savings. The glass is only half full. More than 75 million of our fellow Americans have no access to any form of workplace savings at all.
We need to find creative, cost-effective ways to extend coverage to all working Americans. And I believe we ought to take that on at the same time as we upgrade our existing system. It is up to public policymakers and politicians to find ways to enable and incent small and struggling business to offer automatic, simple, low-cost savings options to their workers.
This will mean compensating companies with tax incentives to cover the costs and designing streamlined, low-overhead savings models with minimal red tape. It will also mean offering workers matching grants on their savings from general government revenues.
The greatest beneficiaries would be younger, low-income workers, whose employers do pay Social Security taxes, but who find the cost and complexity of establishing traditional DC plans too onerous. They need help. And we need to give these Americans a leg up and a stake in our free enterprise system.
This is a challenge I would hope to see this Congress get started on, and it is something that all of us in the workplace savings world should support.
America is moving as we speak from a long era of leverage, consumption, and reckless excess to a new respect for thrift, prudence, hard work — as well as reasonable risk-taking and entrepreneurship. There is little we could do that would contribute more to that change than re-booting our workplace savings system and better linking secure, lifelong income to a lifetime’s labor.
Ladies and gentlemen, we can do this. And if we don’t lead, who will? And if not now, when? Let’s get to work.
Excerpted from a speech given by Robert L. Reynolds President and CEO Putnam Investments, at the 401KWire.Com Influencers’ Summit 2009: DC-IO Partnership Washington, DC May 6, 2009. The full speech is embedded below.
