Kent Conrad doesn’t think much of the current retirement system, and believes “we’ve sort of fallen into” 401ks by happenstance.
He nonetheless acknowledged the “tremendous resistance politically” if large-scale changes were attempted, and therefore advocates for working within the system that was “never designed to be the retirement plan for America,” he said in an appearance on Yahoo Finance’s “On the Move.”
Conrad, a former senator from North Dakota, is a senior fellow at the Bipartisan Policy Center. The Center’s “Funding our Future” campaign was the reason for this appearance, which advocates for a secure retirement for all Americans.
Conrad supports a series of measures, according to Yahoo Finance, “from improving access to retirement plans at work to modernizing Social Security that he says, ‘would dramatically increase retirement income.’”
Conrad added that, taken together,” the estimates are it would increase the retirement income in this country over the next 40 years by 50%.”
Multiple Employer Plans
He said he supports MEP legislation and the president’s executive order to make it easier for small businesses to offer plans.
However, he told hosts Adam Shapiro and Julie Hyman that “the elephant in the room is Social Security” which could be depleted in 16 years, according to a recent report by the program’s trustees.
“I would say the number one challenge is securing Social Security.”
Conrad is far from the only policy wonk to take issue with defined contribution 401k-style plans.
Teresa Ghilarducci, professor of economic policy analysis at the New School for Social Research in New York is an advocate for government-sponsored (and therefore mandated) Guaranteed Retirement Accounts (GRA).
“It’s an improvement on the 401(k) system, which isn’t close to being what’s needed,” she said of GRAs. “It’s like we’re picking up the toddler, and helping this immature, underdeveloped child over the puddle and to the curb.”
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.
