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Thoughts on a Retirement Bill of Rights

Thoughts on a Retirement Bill of Rights

| May 09, 2024

Nuveen recently shared its Retirement Bill of Rights in its inaugural edition of Next Advisor magazine. I think the Rights are a good first step. As with all new things, it triggered some internal debate and thoughts. Here are the Rights and some thoughts.

  1. Right: Every worker in America has the right to save for and achieve a financially secure retirement. Comment: This certainly makes sense and yet is not fully the reality. The Economic Innovation Group pointed out in 2023 that 70% of low-income workers lack access to a retirement plan. And what do we make of the gig workers? Could it also be that a financially secure retirement needs to be based on a living wage? There is only so much a person can save (or even not save if they are dead broke). I am reminded of the adage about the futility of squeezing water from a rock.

  2. Right: Every worker should have access to low-cost investment options that help provide ample income for a dignified retirement. Comment: I certainly am not going to touch the passive versus active debate. Also, I found it to be a bit of a stretch that a low-cost option can help provide ample income. What is the correlation? And how is dignified defined? The cost of living is higher in some cities than others. Ditto to some states. And again, remember the living wage.

  3. Right: Every worker deserves clear information that allows them to compare saving and income options, make informed choices, and meet their retirement goals. Comment: No quibbles from me! And yet, look at how many ways the 401k fee disclosures are written. Some are a long laundry list of every fee. The sheer number of pages might scare off the reader. Others start with esoteric fees that are rarely seen. The heart of the fees is some pages in. Perhaps the reader will be bored by that time? And one 401k provider puts out fee disclosures that refer to another document. The reader has to be determined to find the other document. Know your value and where your options stack up against your competitors. State your case clearly and let the market decide.

  4. Right: The public and private sectors share responsibility for helping every worker access retirement income that will last the rest off their lives. Comment: As with many of these rights, I fear they are a bit promissory which is the bane of any Compliance Department. That aside, I like where these ideas are going based on the SECURE 2.0 rules. Auto-enrollment and auto-escalation are two such ways to help workers join the retirement system and hopefully stay in it.

These are commendable Rights but must be looked at in the context of US business. Are we willing to tackle the hard stuff in order to make these a reality? I think about the recent increase to $20/ hour for fast food workers. There were immediate threats from employers about increased prices and layoffs.

Words on a printed page are nice. Now onwards to the needed actions to make the words a reality.