You are Essential: The Plan Sponsor Community Does Not Need to Apologize

In the history of the world, who has done more to help hundreds of millions of individuals preserve a higher standard of living and greater dignity in retirement than employers sponsoring work-based retirement plans to U.S. workers?   

At the risk of being overly provocative, the answer is “nobody.”   

Critics of the employer-sponsored approach to retirement security are quick to highlight its failings, exaggerate its shortcomings, and contrive a new crisis, and they will give the public an earful as the next president and Congress begin discussing tax reform.   

With recent history as our guide, the critics are likely to:

• Characterize plan participants as unwitting “pawns” and plan sponsors as incompetent or self-interested “anti-heroes.”
• Claim that employers lack appropriate knowledge and resources to prudently provide reliable retirement security.
• Declare that workplace retirement plans are unnecessarily expensive and inefficient, and that employer efforts to provide financial and retirement education has failed.
• Point to governments worldwide that use mandatory schemes to ensure income for subsistence-level retirement consumption, and argue that allowing the “haves” to defer income into 401(k) and 403(b) plans is inherently unfair to the “have-nots.”
• Tell us that a new concept would be better for everyone.

Let’s be clear:

• Plan Sponsors have nothing for which to apologize.
• Plan Sponsors have done — and stand ready to continue doing — excellent work for our employees and our nation.
• Plan Sponsors do more to offer the majority of American workers the opportunity to preserve a higher standard of living and greater dignity in retirement than anyone.
• Plan Sponsors know firsthand that the system works.

In our defense, we should acknowledge the room for improvement and remind the critics that no major societal undertaking to change human behavior is a hundred percent successful or happens quickly.

• According to the U.S. Centers for Disease Control & Prevention, nearly 18 percent of American adults still use tobacco products, despite known harmful effects.
• Despite the nation’s best efforts between 1994 and 2014 to improve student knowledge of geography, the 2014 National Assessment of Education Progress found nearly 75 percent of 8th graders still tested below proficiency (same as in 1994).
• According to a recent GoSavingsRates survey, 69 percent of respondents reported having less than $1,000 in savings. 
• According to the Federal Reserve Board, 47 percent of Americans would need to borrow money or sell something if they needed to pay for a $400 emergency.

Standing firm will not be easy — it is difficult to be painted as the “bad guy.”   

We must allow the critics to express their concerns and reveal their underlying arguments, but we should not concede to their biased and often phony assumptions, assaults, or prognostications. PSCA will continue to work diligently alongside its members to refute incorrect information and to support and improve the employer-sponsored retirement system.   

Under no circumstance should we apologize for anything we have done as a community. We have done — and will continue to do — more than anyone to address the issues of retirement readiness.