Corporate Chiefs, Public Policy Leaders Propose New Direction in Savings Policy: Aspen Institute, CEOs Unveil “Cradle to Grave” Approach to U.S. Savings Crisis
Washington, D.C. – A working group of financial services sector CEOs and public sector leaders today announced a set of proposals to address the deepening savings crisis by encouraging greater saving and ownership at every point in the life cycle.
Led by the Initiative on Financial Security at the Aspen Institute, the unusual partnership of 13 top executives said the current approach to savings policy has failed.
“The status quo has produced a widening wealth gap,” said Lisa Mensah, director of the Initiative. “The hard truth is that we need the government to invest more in helping people save. America needs a meaningful incentive system, delivered through the private sector, that rewards and simplifies saving so more families can build nest eggs for all of life’s goals.”
The group’s report – “Savings for Life: A Pathway to Financial Security for All Americans” – proposes four complementary savings vehicles to facilitate greater savings and asset ownership from “cradle to grave.” The proposals include an innovative investment account for children modeled on the U.K.’s Child Trust Fund; a “Home Account” to be used for the down payment on a home; “America’s IRA,” a simple IRA with a government match for working Americans without an employer retirement plan, and “Security ‘Plus’ Annuities” to provide stable retirement income as a complement to Social Security.
“Increasing savings is critical not only for improving the economic security of American households, but also for enhancing the economic competitiveness and geopolitical security of our nation as a whole,” said Suzanne Nora Johnson, a senior director of the Goldman Sachs Group. “Aspen IFS has brought together private sector leaders because their know-how and participation are essential to helping design plans that reach more Americans.”
The group emphasizes a broader approach to savings policy aimed at reaching low- and moderate-income families that are unable to save for major life goals like retirement, homes and college educations.
“More retirement saving is essential,” said John Tippets, president and CEO of American Airlines Federal Credit Union. “We need to help people develop habits of saving accrue the assets to succeed and move up the ladder throughout life.”
Rep. Phil English (R-PA) said the IFS report “dramatically helps the important work of the Savings and Ownership Caucus. We’ve been working across party lines to improve saving policy, and we thank you for the opportunity to work with you on this very important issue.”
“Savings is the key to greater opportunities throughout life. I applaud the Initiative on Financial Security for expanding the agenda to include lifetime income assurances that will give Americans dignity in their most vulnerable years,” said Rep. Earl Pomeroy (D-ND). “We are seeing the highest level of bankruptcy among those over age 55, and annuities are a way to assure that our seniors will have an income they can count on for life.”
The group was also joined by Reps. Xavier Becerra (D-CA), Thomas Petri (R-WI) and Jesse Jackson, Jr. (D-IL).
To view a view video of the event, please click http://ptvmedia.com/media/?page_id=51.
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The Initiative on Financial Security at the Aspen Institute is the nation’s leading policy program that uses a business-driven approach to create smart solutions that help Americans save, invest and own.