ASPPA CEO and executive director Brian H. Graff's busy week also included a speech at the Congressional briefing on Fiscal Reform and the Future of Lifelong Savings, hosted by the Aspen Institute Initiative on Financial Security. Here are his thoughts on the five biggest myths facing retirement savings:
We all agree that our goal should be to increase the number of workers saving for retirement, and the amount these workers are saving. The question is how do we get there in the most efficient and effective way. An enhanced Saver’s Credit would help lower income workers already participating save more, but by itself it will not substantially benefit those workers who are not covered by a plan and not saving in the first place.
Myth #3: The current tax incentive is ‘upside down’.
This myth arises from a failure to understand how the incentives for workplace retirement plans really work. Nondiscrimination rules require plans to satisfy proportionality tests to make sure that retirement plan benefits don’t discriminate in favor of the highly paid. Further, current law already has a $250,000 cap on the amount of compensation that can be considered in determining benefits.