The Maryland Joint Committee on Pensions, a panel made up of Maryland state legislators, held a briefing Oct. 23 examining the challenges facing the private employer-based retirement system. Brian Graff, CEO/Executive Director of ASPPA and NAPA, participated in the briefing and submitted testimony to the panel.
Graff emphasized to the lawmakers that the problem of expanding retirement plan coverage in the workplace is not one of product cost. Graff argued that the most efficient way to expand retirement plan coverage and increase retirement savings in the private workforce would be to require employers to offer payroll deduction savings at work through private sector service providers while encouraging employers to set up private sector qualified retirement plans.
Competition among private sector firms has driven innovation, resulting in collective investment and a uniform administrative process that has allowed private sector service providers to keep fees low and provide better services for participants, Graff noted. In some cases, record keepers, financial services companies, consulting firms and other professional firms are already maintaining payroll deduction accounts that function exactly as those arrangements are envisioned in various auto-IRA legislative proposals.
Rather than create a new product, it is critical that the availability of payroll deduction retirement savings be expanded by requiring employers above a certain size to make workplace retirement savings available to employees. A number of state legislatures have considered this approach. In Maryland, Del. Tom Hucker (D-Montgomery) introduced a bill in the last legislative session that would achieve this objective. ASPPA will continue to support proposals like the one championed by Hucker at both the federal and state levels.
Andrew Remo is ASPPA’s Congressional Affairs Manager.
