American Benefits Council to Senate Aging Panel: Employer-sponsored Retirement Plans Important for National Savings
WASHINGTON, DC, April 12, 2005 -- "Retirement savings through employer-sponsored plans is the one bright light in an overall dismal picture of how Americans save and current U.S. savings levels," said American Benefits Council President James A. Klein during testimony today before the Senate Special Committee on Aging. He spoke during a hearing on the role of employer-sponsored retirement plans in increasing national savings.
Klein continued "However, the two well-established means of preparing for our financial futures – defined benefit pension plans and defined contribution savings plans — seem more and more like two ships passing in the night. Defined contribution plans are sailing strongly along, contributing greatly to retirement security and wealth accumulation. On the other hand, the fleet of traditional pension plans is shrinking rapidly," said Klein.
"Congress must act this year to enact pension funding reform legislation and to validate the legitimacy and legality of cash balance and other hybrid plans that hold some hope for the continuation of the defined benefit system. While the debate over Social Security may be mired in political and substantive disagreements, there should be wide bi-partisan agreement that to the extent the private retirement system is not as strong as it should be, the pressure on Social Security to ensure retirement income will be even greater. Improvements to the employer-sponsored system should be addressed regardless of whether Congress is able to enact changes to Social Security," Klein noted.
"One of the greatest challenges to retirement income security is the continued rising cost of health care coverage which absorbs available resources for both employers and workers and retirees. Thus, controlling costs and aligning expenditures with good quality outcomes is essential to ensuring that there are ample resources to provide for retirement plans," Klein said.
"My appearance here today is not just to explain the troubles that beset the retirement system, but to also shine a light on its many strengths and to offer a series of policy proposals designed to set our country on the proper course toward improving retirement security. In the American Benefits Council's long-term strategic plan entitled Safe and Sound: A Ten-Year Plan for Promoting Personal Financial Security, we set forth measurable goals supported by a set of policy recommendations to help achieve them. The first three goals relate specifically to retirement systems and concentrate upon improvements to financial literacy, greater coverage by employer-sponsored plans, and raising the levels of retirement savings. Our full report describes the progressive, forward thinking ideas we have developed to support the goals and address the issues I have highlighted today."
Klein concluded, "Not only is the employer-sponsored retirement system essential for the retirement security of all working Americans, but the assets in defined benefit and defined contribution plans also provide the investment capital needed to fuel our economy. Individuals, employers and the government all benefit from a strong economy and a wisely planned for future. The goals found in Safe and Sound will provide markers through which individual workers, employer-plan sponsors and Congress can navigate our country to a much brighter retirement future for all."
Copies of the charts used in Klein's presentation are available by clicking here. The full text of Klein's testimony is available by clicking here.
To arrange an interview with Klein, please contact Deanna Johnson, APR, Council director, communications, or Jason Hammersla, Council manager, communications & publications. Both can be reached by phone at 202-289-6700.
About the American Benefits Council
The American Benefits Council is the national trade association for companies concerned about federal legislation and regulations affecting all aspects of the employee benefits system. The Council's members represent the entire spectrum of the private employee benefits community and either sponsor directly or administer retirement and health plans covering more than 100 million Americans.
###
Click here for more material dealing with current trends, opinion, news, legislative action, investments, marketing, sales, consulting, and legal issues on 401k plans.
This is a press release provided by the company or its representatives. 401khelpcenter.com, LLC is not the author of this release and is not associated or affiliated with any firm or organization mentioned unless otherwise noted. Use of any information obtained from this release is voluntary, and reliance on it should only be undertaken after an independent review of its accuracy, completeness, efficacy, and timeliness. Reference to any specific commercial product, process, or service by trade name, trademark, service mark, manufacturer, or otherwise does not constitute or imply endorsement, recommendation, or favoring by 401khelpcenter.com, LLC.
