The number of people being offered retirement savings plans at work has not improved since passage of the Employee Retirement Income Security Act of 1974, Assistant Secretary of Labor Phyllis Borzi said Wednesday at a Bipartisan Policy Center conference on rethinking retirement.
“We have not moved that offer needle one bit. There are honestly very few new ideas under the sun.”
Having more Americans participate in retirement savings programs “is really job No. 1 that remains undone in the 40 years since ERISA. The current system does some good … but it doesn't do enough,” said J. Mark Iwry, deputy assistant secretary for retirement and health policy at the Treasury Department.
Ms. Borzi, who heads the Employee Benefits Security Administration, said her agency, at the direction of the White House, is trying to help states figure out some new approaches. How ERISA would affect state-level plans “does cause some concern because this is an uncharted area. We still don't know where the boundaries are,” Ms. Borzi said. Some states are considering an “avoid ERISA” approach based on payroll deductions into individual retirement accounts and others are working on “embrace ERISA” ideas such as state-sponsored defined contribution plans and auto enrollment. “If the states are willing to move forward, this is such an important problem that I think we need to be able to help them,” she said.
Mr. Iwry said federal policymakers need to be “very careful not to threaten or compete with 401(k)s.”
Asked about the status of an updated fiduciary standard, Ms. Borzi said the goal is to have it out by the first half of 2016.