Robert Reynolds, president and CEO of Putnam Investments, is calling for legislators to help solve the coming retirement crisis in America. In Washington to speak at the National Institute on Retirement Security, Reynolds proposed, "a bipartisan commission to deliver an action plan to make Social Security solvent by the day after the 2010 election--to generate a more thoughtful, less polarizing outcome."
He also called on Congress to "extend workplace savings coverage to all American workers, make all existing workplace plans more automatic and support robust competition among lifetime income solutions--both annuities and non-annuity variants," according to a February 2 release from Putnam.
Warning that inaction could result in, "severe financial stress on future generations of retirees," Reynolds, who retired from Fidelity Investments as vice chairman and COO before joining Putnam, challenged financial and private industry, political and social organizations and individuals of all social and economic strata to come together to solve the retirement issue
On Social Security solvency, Reynolds recommends that the plan to ensure that Social Security stays in the black should not include an increase in payroll tax, but must preserve retirement benefits for low-income workers.
Reynolds also proposes expanded workplace retirement savings options, through a, "universal IRA or a significantly simplified low-cost version of the 401(k) plan or both," with mandatory features such as auto-enrollment and boosts in the percentage of pay diverted to retirement savings, and "default investment options," all of which were part of the Pension Protection Act of 2006.
Included in the Reynolds plan is a "new lifetime income security fund, comparable to the FDIC in banking," to insure the insurers, a regulator to "approve or deny qualified lifetime products," including annuities and an "optional national insurance charter," according to the release.
Comments? Please send them to email@example.com. Kate McBride is editor in chief of Wealth Manager and a member of The Committee for the Fiduciary Standard.