His latest comments came at gathering of financial services providers and professionals hosted by the Financial Services Roundtable in Washington, D.C. where the outspoken CEO of Great-West Financial and Putnam Investments “called on Congress to act in the best interest of American workers and to preserve and expand tax incentives inherent in the nation’s retirement savings system.”
“A cut to retirement savings incentives in order to ‘pay for’ unrelated tax cuts would be a serious policy mistake,” Reynolds argued. “Congress must not sacrifice the savings individuals will need for tomorrow to fund today’s budget. We should, in fact, strengthen and expand incentives for retirement savings as part of any national tax reform.”
Reynolds is making the rounds in the face of possible tax reform by Congress, and urging support for new policy measures to make workplace savings more accessible to American workers.
In the new book, he draws the correlation between retirement tax incentives and the flow of capital into equity and debt markets, which ultimately drives national economic growth.
Any reduction of those incentives, Reynolds claimed, will likely have a negative impact on growth.
“Personal solvency and national solvency actually reinforce each other,” he added.
It follows that any policy move that increases savings will also likely increase growth. Any policy moves that reduce or inhibit savings may slow future growth,” said Reynolds.
From Here to Security also calls on the financial services industry and policy makers to make improvements to the workplace savings system that would enable millions more Americans to better prepare for a dignified retirement, and in turn, also help spur the country’s long-term economic growth.
“We have a tremendous opportunity to dramatically improve income replacement in retirement for all working Americans,” Reynolds noted. “While we know that a strengthened workplace savings system would be extremely beneficial for individuals and families, the additional savings would also provide the U.S. economy with a much-needed growth engine by fueling our capital markets, business development, job creation and more.”
“On a macro level, meeting our retirement challenges head-on would create a tremendous spirit of American renewal and optimism, by taking charge of our own destiny,” he added.
Reynolds—who also oversees Empower Retirement, the nation’s second largest retirement service provider by participants—explained that the nation holds some $26 trillion in retirement assets, yet tens of millions of U.S. citizens lack access to on-the-job savings plans.
Policy fixes that make multi-employer plans easier to set up and administer could go a long way to expanding plan access. In addition, Reynolds pointed out that the long-term solvency of Social Security is essential, as the program serves as the foundation for all Americans’ security.
“If workers across the United States can be given access to a retirement savings plan, which makes use of proven best practices, we can help position millions of additional Americans for a more successful outcome,” he said. “Solving America’s retirement challenge is very much within our grasp.”