Blackstone Group President and Chief Operating Officer Hamilton “Tony” James called for a national retirement savings plan to address inadequate retirement preparedness that will hit the next generation of Americans particularly hard.
“We absolutely have to start now,” Mr. James said at a Center for American Progress conference in Washington on Wednesday. “It has to be mandated. Nothing short of a mandate will provide future generations a secure retirement.”
Mr. James recommended a proposal by Teresa Ghilarducci, director of the Schwartz Center for Economic Policy Analysis at The New School in New York, to create a retirement savings plan for everyone based on 3% annual salary contributions shared equally among employees and employers. The federal government would guarantee a 2% return, through a modest insurance premium on such accounts. “With corporate profits at an all-time high, this should be a manageable burden,” he said, adding that the approach “is going to require us to look beyond the next election cycle.”
Mr. James also called for redirecting $120 billion in annual retirement tax deductions to give every worker a $600 annual tax credit to save for retirement.
Speaking at the same event on creating long-term value, Treasury Secretary Jacob Lew said the corporate tax system “is broken” and that capital gains rates should be higher. “But we also have to realize that that is not the whole answer,” Mr. Lew said.