We can’t keep up.
Retirement plan coverage for workers is getting better, then it’s getting worse. The states need to step in, then MEPs will somehow be the answer.
If you’re confused, join the club.
And now the Schwartz Center for Economic Policy Analysis at The New School (with high-profile director Teresa Ghilarducci) has entered the fray to muck it up even more.
“American workers’ access to retirement savings coverage is getting worse,” the researchers starkly write. “New data show that employer-provided retirement coverage for all workers dropped 4 percentage points between 2014 and 2017 to 40 percent. Coverage for those nearing retirement—workers ages 55 to 64—fell 7 percentage points to 44 percent.”
The data shows that from 2014 to 2017, no group of full-time workers saw a significant increase in coverage, they add.
“And while coverage declined for every demographic group analyzed, some groups lost more than others. The coverage rate for white (down five points to 43 percent), black (down five points to 38 percent) and Asian (down four points to 37 percent) workers declined by large amounts. Coverage for Hispanic workers (down one point to 29 percent) remains lower than for other workers.”
Not surprising, they then pitch Ghilarducci’s plan for Guaranteed Retirement Accounts (GRA), which she’s pushed for some time along with Tony James, president of Blackstone Group who was considered a possible Treasury secretary if Hillary Clinton won the last election.
“Policymakers need to ensure workers can afford to retire by both strengthening Social Security and providing all workers with GRAs. GRAs are individual accounts on top of Social Security that require contributions from employees, employers and government throughout a worker’s career. They provide a safe, effective vehicle for workers to accumulate personal retirement savings over their lifetime of work.”
Yet Andrew Biggs is crying foul at the researchers’ entire premise.
Biggs, resident scholar at the American Enterprise Institute and former deputy commissioner for policy at the Social Security Administration, notes that they relied on the Census Bureau’s Current Population Survey, which a number of organizations recently—the Investment Company Institute among them—have claimed is flawed.
“What actually happened has very little to do with pension coverage and a lot to do with how we measure pension coverage,” he writes. “In 2014 the Current Population Survey redesigned how it asks households about both retirement plan coverage and the income they receive from those plans in retirement.”
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
