Robert L. Reynolds, President and Chief Executive Officer, outlined a sweeping retirement reform agenda in Washington, D.C. before an audience of the nation’s 401(k) industry leaders, retirement plan sponsors, and mutual fund executives. Continue reading »

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. Continue reading »

Here are just a few elements that should be at the heart of the next great step forward in retirement legislation: “The Workplace Savings and Lifetime Income Act of 20-something…” Hopefully, it will happen in 2010 or maybe 2011 — the sooner the better! Continue reading »

As we know, academic studies, pilot projects, and early adoption by pioneering plan sponsors preceded every major element of the PPA’s core policies, from auto-enrollment to savings escalation to the use of life-cycle defaults. It is time now for plan sponsors and providers to continue that tradition of innovation and begin acting right now — under current law — to pioneer the best practices that will lift workplace savings to a new level. Continue reading »

Today’s retirees as a cohort draw a major share of their income, roughly two thirds, from pre-programmed sources such as traditional pensions and Social Security. But as we know, both of these sources are shrinking in terms of their ability to replace shares of retirees’ incomes. Each year going forward, future retirees will have to find ways to convert a growing share of their own savings to fill this widening “gap” in programmed income. This is why we believe that all workplace plans should embed options to provide protected and insured lifetime income. Continue reading »

Let me illustrate, using hypotheticals, the case for some of the products and strategies we believe should be integrated into future workplace plan design. We looked at how a $100,000 portfolio would have fared over the decade ending with 2008, had it been invested in either the S&P 500 or in an absolute return strategy that actually hit its target of outpacing Treasury bills by 5% a year. As you know, equities rose and fell, and then rose and fell hard again, leaving a net loss of roughly 13% over this time frame. Continue reading »

The goal, as we see it, is to strengthen defined contribution plans and enable them to meet the retirement needs of future generations. To paraphrase Bill Clinton, “Let’s mend them, not end them.” Just as the PPA marked a qualitative change from first generation DC plans, especially by endorsing much better design for the accumulation phase, version 3.0 of workplace savings needs to finish the job that PPA started and extend better design ideas through the distribution phase as well. Continue reading »