SURVEY SAYS: On what retirement plan issues should policymakers focus?

Last week, I asked NewsDash readers “On what retirement plan issues do you think policymakers should focus?”

The majority (53%) selected “expanding incentives for employees to save.” At 38%, “expanding incentives for employers to offer retirement plans” ranked second. Twenty-nine percent of readers had an “other” response (we’ll get to those later).  

Twenty-six percent of respondents selected “limiting access to retirement plan accounts before retirement,” and 22% chose “retirement income options in defined contribution plans.” Fifteen percent of readers said policymakers should focus on “requiring a projection of retirement income on participant statements” and a mere 2% selected “mandatory employer IRA offerings.” 

“Other” responses included: 

  • maintaining viability of MediCare. 
  • Stabilizing discount rates in Defined Benefit Plans 
  • electronic delivery of plan materials 
  • encouraging DB plans 
  • Scare employees into saving so the taxes of those of us who do save do not go up in order to support those who either do not save or remove money from their 401(k) without thought to the future. 
  • SIMPLIFY please. Regs, paperwork, notices are out of control. 
  • The return of defined benefit plans. 
  • 1) Shoring up Social Security 2) DB plan funding reform and 3) DB & DC regulatory requirements reform 
  • Agree on the problem and develop a goal and strategy 
  • None – would rather they leave retirement regulations alone for a while 
  • The inability of the average American to retire due to lack of funds. This is in part due to the inability to save due to low incomes and significantly due to the destruction of retirement assets and the ability to save by corporations and the government. 
  • Expanding medicare coverage so that retirement savings are not eaten up by medical care needs. Offering help to retirees who are not able to care for themselves but wish to remain in their own homes. 
  • Abolishing discrimination testing in defined contribution plans 
  • Nothing 


Among the verbatim comments, readers talked about fixing the social security system and returning to defined benefits plans. Several said policymakers should stay out of the retirement business. My favorite comment was: “First, do no harm. Second, remember the first.” 


Consider grouping some of the retirement plan types into fewer choices. (401k-403b-457 could be combined into one 40137 plan--but don't reduce the maximum allowable annual contribution amounts. 


We need to encourage more saving, not less, so that individuals can appropriately provide for themselves during retirement. 


Given that you have been unable to "fix" social security, I do not hold out much hope that you will reach agreement re private retirement plan; but there is always hope! 


Revisit the whole issue and, perhaps, force companies to provide some funding toward retirement for their employees. The DB/DC model may have been expensive in current dollars but we'll soon have a large core of underfunded retirees who will have to fall back on the system. 


Restructure retirement benefits (pension & health care) for members of congress. LOWER entitlement, INCREASE or mimic private employers. 


regulations need to allow for opt out of printed materials. We need to enable website to decimate savings messages in simple media that encourages financial security. This can drive out plan expenses and foster participant engagement! 


Keep your hands off our employer-provided retirement plans and IRAs!! 


I think they should: 1) Make it easier for companies to offer defined benefit/pension plans. A lot of people aren't interested in investing, don't care to learn and need a more auto-pilot approach to securing some retirement income. 2) Expand the Social Security wage base such that dramatic benefit cuts are not necessary in combination with making the payroll tax cut permanent. 


Fix Social Security 


They should amend the regulatory and financial burdens that discourage DB plans from being adopted or continued by corporations. 


Retirement costs are hurting all of us in the public and private sectors and most people are not prepared for extended retirements. Something needs to be done to correct the problem and to get people to realize that there isn't a free ride after retirement. 


I really feel people have to take responsibility for they own retirement and if they give up a little now and put more in for retirement it can work but we do not need more government intervention into our lives 


The 401(k) can only be successful when investments are increasing in value. Many of us "Boomers" have lost as much as we have saved in 401(k) plans. Contributing the same amount to some type of defined benefit plan would have yielded a better outcome for us. We need to rethink the structure of retirement plans, incentives for providing them, and provide for individual contributions to them. 


All of the above (options) would seem irrelevant if employers opt out of plan sponsorship because of regulatory handcuffs. What's the expression "...a one-armed paperhanger with an itch." 


It seems in this country we always start out trying to fix the problem before identifying it. Governments primary goal should be identifying the problem, developing a goal to fix it and a strategy for everyone to follow...then and only then, come up with tactics, like those above, to implement the strategy. Without a strategy, we end up with documents like the Internal Revenue Code.

Verbatim (cont.)  

Social security reform 


Quit being crooks. 


It is in our national interest to ensure that citizens have adequate income in retirement. We owe it to people who have worked hard all their lives. 


Year-end discrimination testing of DC plans serves no purpose. So WHAT if the HCEs put the max in? Keeping them from doing that will not make the non-HCEs save nor encourage the HCEs to give them incentive to save. The plan is there and the non-HCEs will save if they see its importance. It should not matter to the government that the HCEs have saved the max. Eliminating year-end discrimination testing can only simplify the job of the plan administrator, which is a big plus. 


I read that there was a provider to a plan that did something the DOL didn't like, with no actual harm to the plan, but the DOL didn't like it, but couldn't do anything about it. I think the DOL should reissue all regulations under ERISA to make sure they can address that particular case. I don't think it should matter what the effect is on the 99.99% of plans that run correctly and appropriately. 


401(k) limits are too low for employees to save adequately for retirement 


Instead of toying and experimenting with retirement plans, policymakers should focus their attention on cutting spending. 


First, do no harm. Second, remember the first.