On June 24, 2010, Pamela Perun, Policy Director of Aspen IFS, participated in the Heritage Foundation’s retirement policy conference “U.S. and the Netherlands: Converging Paths to Retirement Security.” Perun served as a discussant on the panel, ‘Improving Participation and Outcomes Through Incentives and Education,’ which focused on the importance of incentives and education in retirement savings system design.
Perun asserted policymakers should be careful not to conflate the goal of promoting strong saving behavior with the misguided attempt to make every American into investment experts. Rather than focusing on expensive, remedial education, steps should be taken to promote regular, consistent savings. We cannot, and should not, expect Americans to master the complexities of portfolio management, Perun asserted.
Perun urged policymakers to address what she called the “product” problem. Policymakers should strive to provide efficient savings vehicles and appropriate investments that can safely grow worker contributions into substantial assets, she affirmed. Perun agreed that the Obama Administration’s Automatic IRA proposal would be an important step in providing Americans — especially to those who have no connection to the financial mainstream — access to a simple and automatic savings vehicle in the workplace. Perun went onto insist caution in determining an appropriate default option for the Automatic IRA and offered up Aspen IFS’s Real Savings+ (RS+) innovative investment options as an example of how policymakers can provide Americans a robust, yet secure default investment option.
Other panelists included Shaun O’ Brien, Senior Vice-President for Economic Security Strategy at AARP; David C. John, Senior Research Fellow at the Heritage Foundation; Niels Kortleve of the Dutch Pension Fund PGGM; Johan Barnard, from the Ministry of Finance in the Netherlands; and Harman Korte, Managing Director and Board Secretary at the Netherlands Authority for Financial Markets (AFM).
For more information about the event or to watch a video of the panel, click here. The ‘Improving Participation and Outcomes Through Incentives and Education’ panel begins at 5:01:00 into the video.