The U.S. Chamber of Commerce has made suggestions in a recent paper for ways to bolster the private sector retirement system.
The keys to strengthening the system, says the Chamber, is to strengthen the current retirement structure, address the demographic changes and retirement needs of an evolving workforce, and encouraging innovation and flexibility. The paper offers specific recommendations in each area.
To strengthen the current private system, the chamber suggests: supporting retirement security through tax policy; reforming multiple employer plans (MEPs) to expand their use; streamlining notice requirements; encouraging the use of electronic disclosures;
developing incentives for plan sponsors that want to maintain defined benefit plans; addressing the required minimum distribution rules; increasing the involuntary cashout limit; facilitating the preservation of retirement assets; and encouraging the increase of plan sponsorship among small businesses.
To address demographic changes and the retirement needs of an evolving workforce, the chamber suggests: encouraging employers to offer voluntary products that address longevity; eliminating barriers to phased retirement; encouraging additional distribution options to facilitate lifetime income; encouraging and expanding retirement education and literacy; ensuring that state sponsored retirement programs do not undermine ERISA or create unfair competition in the marketplace; and encouraging the voluntary use of private disability insurance and furthering education about its benefits.
Steps the chamber argues will encourage innovation and flexibility include: providing small businesses a dedicated voice on federal advisory councils; assessing the future role and mission of the Pension Benefit Guaranty Corporation; encouraging new plan designs;
encouraging automatic plan features; and promoting the benefits of employee stock ownership plans (ESOPs).
The Chamber contends that progress has been made in supporting the employerprovided
system, but argues against resting on one’s laurels. “Additional steps are necessary to continue the success of this system. It is imperative for policymakers and regulators to continue to develop additional initiatives that maintain this positive trajectory and build on the success of the private retirement system,” the paper says.