This article was written by FSI’s president and chief executive, Dale E. Brown, and the full article originally appeared in Investment News.
While most Americans are not aware of it, a broad nationwide trend is underway that could profoundly impact the choices and tools that are available to them as they plan for retirement. Across the country, state legislators have introduced bills that would establish state-run or state-assisted retirement plans for private sector workers who do not participate in an employer-sponsored plan; others are considering bills that would create exploratory task forces and studies on the feasibility of such plans. In 2014 alone, lawmakers in 14 states proposed 26 separate bills along these lines.
I applaud these legislators’ efforts to address the issue of retirement readiness in their states. As a recent Federal Reserve survey pointed out, 31% of Americans currently have no savings or pension assets set aside to help them through retirement. Clearly, this is a serious problem that both industry and policymakers must work together to solve.
Unfortunately, the proposals that have emerged in the states to implement state-run retirement plans could very well take us in exactly the wrong direction. Despite state lawmakers’ best intentions, the net result of these efforts could be a reduction in investor choice and further limitation of access to high-quality, objective financial guidance. A retirement plan is of little use if affordable, independent advice is not available to the participants.
FSI has engaged directly on these proposals in 9 states in 2014; although the bills in the other 5 states were not expected to pass, we also monitored them closely, as well. While we are happy to report that none of the bills passed this year, much additional work remains ahead of us.
Read the rest of the article on Investment News.