The American Council of Life Insurers and the American Society of Pension Professionals and Actuaries wish they were playing a more prominent role in the 2006 National Summit on Retirement Savings, which started today.
Bush administration officials and others should be paying more attention to the role that the life insurance industry can play in helping Americans save for retirement, ACLI President Frank Keating said here at a press conference that the ACLI, Washington, sponsored with the ASPPA, Arlington, Va.; the National Association of Insurance and Financial Advisors, Falls Church, Va.; and a NAIFA affiliate, the Association for Advanced Life Underwriting, Falls Church, Va.
The ACLI and the ASPPA are involved with the summit but not playing a major role in summit presentations.
“The products of this industry, which are not a part of this conference, need to be,” Keating said.
The Bush administration has proposed creating a system of 3 types of savings accounts that could reduce or eliminate the tax advantages that Americans now gain by purchasing life insurance policies and annuities.
“It is important to emphasize savings, but it is also important to emphasize what kind of savings,” Keating said. “Not all savings are alike.”
By treating all types of savings alike, the administration proposals fail to acknowledge the value of annuities and life insurance policies in encouraging long-term savings, Keating said.
Brian Graff, the executive director of the ASPPA, appeared at the press conference to defend the tax incentives that encourage employers to offer retirement plans.
“Workplace retirement plans have been one of the most effective means of getting low to moderate income workers to save,” Graff said.
One recent study found that 78% of workers who had an employer-sponsored plan were saving, while only 4% of similar workers without an employer plan were saving, Graff said.
The convenience of direct payroll deductions into a retirement account, the “culture of savings” at employers with retirement plans, and incentive programs such as employer matching of contributions all “are responsible for making middle class Americans a part of the ownership society the president talks about,” Graff said.
Some administration efforts to streamline the tax code and give workers more opportunities to save on their own could end up reducing incentives for employers to offer retirement plans and for workers to save, Graff said.
“We need to be careful to continue to emphasize long-term savings,” Graff said. “Why would [workers] lock up their money for retirement if there was no incentive to do so?”
Correction: Due to an editing error, an early version of this article described the role of the ACLI and ASPPA in the summit incorrectly. As indicated here, the organizations wish they were playing a more prominent role in the summit, but they are participating.