A special blue-ribbon committee began work Monday to develop a comprehensive plan to reverse a decades-long trend and get Americans saving more for retirement.
The Bipartisan Policy Center, a think tank that houses elder statesmen from both major political parties, launched in late April the Personal Savings Initiative, concerned by data it says shows that half of all American households have less than $12,000 in retirement accounts.
Individual savings have been declining steadily since the late 1970’s, and defined-benefit plans that provided workers a guaranteed pension are now a rarity in most businesses. Only 46 percent of workers last year had access to a defined-contribution account, such as a 401 K plan provided through their employer, research shows. And only 38 percent of all workers contribute into these retirement accounts.
Too many Americans are counting on payments from Social Security or its disability insurance program, which is projected to run out of funds in 2016. That may be the time to take legislative action to help Americans save more, either through incentives or mandatory contributions.
“If an opportunity presents itself, you’ve got to be ready,” said Kent Conrad, a former North Dakota Democratic senator who is leading the initiative.
Meeting with reporters while a full committee held its first closed-doors meeting nearby, Conrad said a “whole series of issues” were going to be discussed to find a common approach that could get through a deeply divided Congress.
The committee will release its action plan early next year.
Another leader of the initiative, former New Mexico Republican Sen. Jeff Bingaman, expressed confidence that there is “bipartisan support for the notion” of boosting retirement savings. The challenge, he suggested, was developing proposals that will win legislative support.
The Bipartisan Policy Center in 2010 issued a detailed plan for reining in widening deficits and debt, which helped shape broader discussions on the nation’s fiscal challenges. It hopes to now do the same on retirement savings with a committee that boasts a number of prominent researchers, along with private-sector and union leaders.