During the closing session of their 90th annual meeting in Reno, Nev., this week, the U.S. Conference of Mayors adopted a bipartisan resolution calling on federal policymakers to strengthen retirement security for low- and middle-income American workers.
Specifically, the resolution urges Congress to look to the highly successful Thrift Savings Plan (TSP), currently available only to federal workers and members of the military, as a model for expanding savings opportunities and improving incentives for workers left behind by the current retirement savings system.
The resolution was sponsored by Denver Mayor Michael B. Hancock, Birmingham Mayor Randall Woodfin, Fort Lauderdale Mayor Dean J. Trantalis, Oklahoma City Mayor David Holt, San Diego Mayor Todd Gloria, Tempe Mayor Corey Woods, College Park Mayor Patrick L. Wojahn, Des Moines Mayor Frank Cownie and Madison Mayor Satya Rhodes-Conway.
“The country’s mayors are calling on Congress to come together on a bipartisan basis to invest in hardworking low- and middle-income Americans by ensuring they have access to high-quality savings plans and well-designed incentives that encourage work and savings,” Mayor Hancock said. “The opportunity to save for a fulfilling retirement will help to level the playing field for those working hardest and ensure multi-generational financial security for families across the country.”
The Economic Innovation Group (EIG) was quick to commend the mayors for adopting the resolution, saying in a statement its passage demonstrates continued momentum following the recent announcement of a bipartisan, bicameral congressional working group to develop policy solutions to boost retirement security and improve access to well-designed savings plans for millions of American workers.
“Providing access to high-quality savings plans and meaningful incentives for low- and middle-income workers–most of whom are currently overlooked by federal retirement policy—would be a major step towards improving the well-being of millions of workers and families across the country,” said EIG President and CEO John Lettieri.
In 2021, EIG outlined the proposal to give working Americans access to a program modeled after the TSP and detailed its transformative potential in a white paper co-authored by a bipartisan pair of economists, Professor Teresa Ghilarducci and Dr. Kevin Hassett.
Under their plan, “the lower-wage workers left out of retirement plans (like the analysis outlines) could accrue as much as $43,000 with 10 years of matched savings—or $600,000 from age 25 to retirement. This would have transformative wealth-building potential for working Americans.”
While Denver and other cities across Colorado have emerged as leading enclaves for economic growth and dynamism, Colorado recently ranked second-highest in the nation in asset wealth inequality—a measure of inequality comprised in part by retirement savings balances—and more than half of workers in Colorado earning less than $50,000 lack access to an employer-sponsored retirement plan.
Federal tax incentives for retirement savings are heavily skewed to high-earning workers; meanwhile, the median retirement savings balance among working-age Americans is $0, and nearly half of households risk seeing a cut to their standard of living during retirement.
A recent EIG national survey found that the vast majority of voters (81%) are concerned about retirement security—a sentiment shared by voters in both parties with 86% of Democrats and 76% of Republicans agreeing on the issue’s importance.
View the full text of the U.S. Conference of Mayors resolution here.
SEE ALSO:
• New Congressional Working Group Seeks to Expand Retirement Security
• States with Dismal Access to Low Income Retirement Plan Options
• Senate Introduces SECURE 2.0-Like Retirement Bill
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.
