Current situation

In 2006, a quarter-century after the first 401(k) plans were launched, 62 million Americans participated in a workplace retirement plan.

Retirement challenge

75 million American workers still lack any access to workplace retirement savings plans.

Bob Reynolds’ Retirement Reform Agenda

Develop creative, cost-effective ways to help small or struggling businesses offer simple, low-cost savings options to workers.

This is one of the proposed retirement savings reforms proposed by Bob Reynolds, President and CEO of Putnam Investments. For the full list, read the blogs in the Workplace Savings 3.0 category and see the document embedded below.

Bob Reynold’s Retirement Reform Summary

The decision to give up some control of assets is hard for many people to make and needs incenting.

Employers have little incentive to match workers’ contributions to 401(k) plans, and many are, in fact, canceling or reducing company matches.

Alternative investment strategies are offered on only a limited basis in many 401(k) plans, depriving workers of valuable solution strategies.

90% of plan participants are interested in embedded options to provide protected and insured lifetime income.

“Auto-pilot” 401(k) plans work: 90% of auto-enrolled employees have stayed in their plans. But, since “auto-pilot” provisions are optional, many employers have not adopted them.

Employers are concerned about their liability if they offer employees access to advice or guidance.

Some providers inundate participants with useless and irrelevant information.

Some lifecycle funds had excessive allocations to equities and lost heavily in 2008, even for people very near retirement.

Irrational competition among providers of income guarantees could put workers’ security at risk in case of provider failure.