U.K. and U.S. research clinics have teamed up to explore ways of bettering plan designs for low- to moderate-income earners, whose retirement savings are challenged by the gig economy.
NEST Insight and the Aspen Institute, through its financial security program, share an ambition to enable defined contribution plan participants to adopt a much more holistic approach toward their savings.
NEST Insight is the research arm of NEST Corp., which is the trustee for the £2 billion ($2.8 billion) National Employment Savings Trust, London, the national workplace defined contribution plan.
With many defined benefit funds now closed in both the U.S. and U.K., DC plans are no longer considered supplementary, according to NEST Insight. And longer lifespans, too, mean plan executives must find new ways in which adequate retirement outcomes could be achieved for participants. Plan participants should be able to access their savings in non-traditional ways, so the researchers will be developing models for new hybrid products using machine learning.
The researchers, in an effort to inspire policymakers to endorse these products, want to solicit ideas from the industry to improve the chances of coming up with relevant solutions, such as emergency savings accounts.
"We're excited to embark on our new transatlantic collaboration with the Aspen Institute Financial Security Program," said Will Sandbrook, executive director of NEST Insight, in an emailed comment. "We believe that two immediate challenges affecting the financial health of British and American families include the growing trend of non-traditional employment and the increasingly complicated and unstable household balance sheet. By coming together, we'll create a platform from which to identify and analyze possible solutions."
Lessons from the U.K.'s NEST could help U.S. states to adopt solutions based on the implementation efforts observed in the U.K., the Aspen Institute said in a news release.