Senators seek more retirement plan pop

Legislators looking for ways to boost Americans' savings for retirement and access to advice

Dec 11, 2013 @ 2:18 pm

By Liz Skinner

Two lawmakers who championed retirement plan reforms in 2001 are seeking more changes that would boost Americans' savings for retirement.

"The top of my list is that we need to do something to encourage more lifetime income options. Too many individuals are outliving their retirement income," Sen. Ben Cardin, D-Md., said at an Insured Retirement Institute panel discussion on retirement security challenges in Washington on Wednesday. "I'm also very concerned about investment advice."

Americans "need investment advice" and he wants to make sure the fiduciary rules that the Securities and Exchange Commission and the Labor Department are working on don't prohibit advisers from offering reasonable counsel, Mr. Cardin said.

"Advisers shouldn't be prevented from providing common-sense advice," he told reporters after his remarks.

Sen. Cardin didn't offer specifics on his interest in new lifetime income options, other than saying his goal is to take the pressure off Social Security and allow people to live comfortably throughout their retirement.

Sen. Rob Portman, R-Ohio, said he also wants to find ways to encourage people to save more.

"We have to make sure people have a backstop," he said. "Social Security was never meant to be the sole source of retirement income."

Declaring that "the 401(k) model works," Mr. Portman said he doesn't want to see Americans rely only on individual retirement accounts, which don't offer matching contributions and don't come with investment advice or auto enrollment.

"As people are living longer and as Social Security is under more and more pressure, we need to encourage people to save for their retirement," he said.

In 2001, when they both were members of the House, the two senators sponsored retirement security legislation known as the Comprehensive Retirement Security and Pension Reform Act. The legislation boosted contribution limits for retirement plans, expanded small-business plan access and allowed for auto enrollment.

Sen. Cardin said he'd also like to further strengthen auto-enrollment rules for retirement plans.

"Americans are famous for making decisions by inaction," he said.

Lisa Dolly, chief operating officer of Pershing, said at the same IRI event that studies show households that have advisers save twice as much as non-advised households — and they save more quickly.

Specifically, one study showed that after working with an adviser for four to six years, households had 58% more in savings than those without an adviser, she said. After working with an adviser for seven to 14 years, households had 99% more than those who didn't have an adviser.

0
Comments

What do you think?

View comments

Recommended for you

Featured video

INTV

Advisers beware: tax law has unintended consequences

Commission accounts could be preferable for some clients, and advisers could be incentivized to move from employee broker-dealers to independent channels.

Recommended Video

Path to growth

Latest news & opinion

Tax reform: 7 essential strategies for financial advisers

While advisers face the difficult task of analyzing the law's impact, they will also have a significant opportunity to prove their value by implementing money-saving strategies for clients as well as their own businesses.

Tax law: Everything advisers need to know about the pass-through provision

The provision is tricky, but could provide advisers and business-owner clients with sizable tax savings.

Bill requiring fiduciary disclosure reintroduced in New Jersey

Measures would obligate financial advisers to tell clients they do not have to act in their best interests.

Merrill Lynch to let advisers text with clients

Texting has been a popular mode of communication for years, but in the past the firm's regulations have prevented advisers from using it.

Bear market for bonds has arrived, Gross says

10-year Treasury rate's move above 2.5% confirms outlook for fixed income, legendary bond manager says.

X

Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print