The forum, presented by the pro-participant Pension Rights Center, was dubbed the “Conversation on Coverage”, and it brought together a veritable who’s who of expertise to the table.
The Conversation was cosponsored by the likes of AARP, the AFL-CIO, the Communications Workers of America, the Employee Benefit Research Institute and others. PLANSPONSOR magazine cosponsored a reception held to celebrate the project?s launch.
An opening panel featuring Ann Combs of the US Department of Labor, Michael Baroody of the National Association of Manufacturers, and Gerald Shea of the AFL-CIO kicked things off.
“It?s important that business and labor are both here today,” Ann Combs, Assistant Labor Secretary and head of the Pension and Welfare Benefits Administration, told the 60-some-odd people in attendance. The recently enacted Economic Growth and Tax Relief Reconciliation Act offered plan sponsors “long needed incentives” to provide retirement programs, she said, and yet only about half of Americans in the private sector receive an employer-sponsored retirement benefit.
Later, attendees met behind closed doors to discuss employer versus employee inducements to beef up access to coverage. Some felt employers have had sufficient prodding. If the new pension reform bill’s bevy of employer-friendly provisions are not enough to convince employers to expand retirement programs, “it?s not worth talking about that anymore,” Robert Patrician of the Communications Workers of America told PLANSPONSOR.com following the event. But greater retirement tax benefits for lower-paid workers?those in the 15% tax bracket, for example–might have some impact, he reasoned.
ERISA co-author Michael Gordon had a different notion. Gordon advocates a strategy that “moves away from an employer-based system and doesn?t rely on employees to pick up the slack.” His idea: for a professional association like AARP would offer a “universal plan” based on voluntary contributions from employers, employees and independent contractors.
” The professional group would be “federally licensed to run these plans if they met certain standards,” says Gordon. “You could work out a payroll deduction plan like sending Social Security to the government.” Plan sponsors and participants would no longer have to worry about fiduciary or investment risk, he adds, and “You?d get really solid improved coverage and delivery of benefits.” Of course, such a scenario would require a change in the tax code.
William M. Mercer’s Anna Rappaport , a former president of the Society of Actuaries,came away from the meeting with a startling new insight: when it comes to employee savings vehicles, workers from all walks of life?including the public and non-profit sectors–want 401(k) plans and only 401(k) plans. “If you took all of the nation?s 403(b) and 401(a) plans and SIMPLE plans and renamed them–i.e., My Company?s Non-profit 401(k)?plan participation could skyrocket,” according Rappaport told PLANSPONSOR.com .
Information on the Conversation on Coverage can be found at www.pensioncoverage.net .
Papers/presentations related to the Conversation on Coverage are available at
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