IaBL Calls for Mandatory Retirement Assets Census as Part of Social Security Privatization

Investment and Benefits Literacy.org Calls for the US Census to include household information on all accumulated retirement assets. The Census Bureau would forward the aggregated retirement savings data to the Department of Labor's Employee Benefits Security Administration for distribution to every taxpayer.

West Caldwell, NJ December 9, 2004 -- Investment and Benefits Literacy.org (IaBL), a non-profit education clearinghouse specializing in training Lower and Middle Income (LMI) workers on their health benefits plans and retirement savings programs, urges Government Regulators and Congressional lawmakers to create a "milepost map" of demographic benchmarks as an essential priority of any new Social Security retirement-income reform.

"It's been 20 years since the first 401k plans were introduced, and the empirical data is abundant and easy to interpret", says Douglas Klein, Executive Director of IaBL, "the establishment of new 401k plans has virtually ceased in both the large and small employer segments, with only half of U.S. workers active in a qualified retirement plan.

More significantly, there are only 5.5 million workers older than the age of 55 still participating in 401k plans, compared to 11.4 million active workers ages 45-55. For those employees over the age of 60, only 37% have a retirement account balance larger than $70,000. Additionally, black and Spanish-speaking workers are far less likely than white workers to participate in voluntary retirement plans."

IaBL is calling for the creation of a systematic survey that would more precisely gauge the success of our national savings efforts, especially for older workers and those in the LMI tax-brackets.

"We propose that every American household, when they complete their Census questionnaires every 10 years, include the total balances of their qualified retirement savings accounts ", says Klein.

IaBL proposes legislation that would require the Department of Labors Employee Benefits Security Administration to issue a report detailing the total savings of all Americans, parsed into discrete demographic categories, sorted by age, income brackets and heritage. In addition, every US worker would receive a statement from the EBSA every 10 years, estimating for them the actuarial balances they would need to replace 50% of their estimated final salary earned at age 67.

Existing Federal Code, no matter how well-intentioned, doesn't account for the fact that it has become unlikely for an American worker in contemporary society to keep a private-sector job, without interruption, until the normal Social Security retirement age of 65-67 is attained.

The Congress did an adequate job establishing the front-end of our retirement savings infrastructure, explains Klein. The crisis lies in the back-end of the employees working career putting money aside and investing over a career to accumulate a retirement plan lump sum and that element of the agenda is now dominated by the US financial services industry.

After studying this matter carefully, IaBL believes that the Government needs to take a more prominent role in officially informing American workers where their progress lies over time especially elderly and lower income workers who traditionally dont have access to financial advisors and to online investment literacy services.

By reviewing and analyzing the Census Data compiled by the Department of Labor, all US workers will get an official diagnostic report on their savings progress, compared to their peer groups nationwide. We must all acknowledge together that its not appropriate for the private sector to have sole responsibility for engineering the retirement security of 50-60 million workers, Klein concludes.

For the full text of the IaBL Retirement Census Proposal, please visit the Articles section of our website www.investmentliteracy.org.

About Douglas Klein, Executive Director
Mr. Klein is a widely-quoted media source for technical information relating to all aspects of employee benefit plans. He has worked in the Benefits and Investment industry since 1986 as a product specialist and a client relationship executive for Prudential Investments, Bank of America, Morgan Stanley and United Healthcare. Mr. Klein is currently a member of the Economics Department faculty at Kean University (Union, New Jersey) and he is a Project Manager for financial literacy campaigns in New Jersey's urban communities.

Benefits and Investment Literacy.org
759 Bloomfield Avenue, #230
West Caldwell, NJ 07006

Contact:
Douglas Klein
Executive Director
(201) 935-3995
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