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    Insights   •   Defined Contribution

    An Open Letter to Congress: Advocating for a SECURE Retirement Future

    On May 23, 2019, the House of Representatives took a significant step towards ensuring workers’ retirement security by passing the Setting Every Community Up for Retirement Enhancement (SECURE) Act. But momentum has stalled in the Senate - and the ground gained this Spring could be lost by Fall.

    Our open letter to Congress is meant to refocus policymakers’ attention onto the:

    • Urgent retirement-related issues thatworking Americans’ face 
    • Ways in which SECURE could offer meaningful solutions

    The numbers are sobering. Nearly 40% of working households in the U.S. don’t have access to the primary retirement savings vehicle: an employer-sponsored defined contribution (DC) plan.i The result of limited savings access is savings insufficiency, currently estimated to bring a $3.8 trillion shortfall crashing down on retirees and their regional governments.ii

    But even those with access to a workplace savings plan:

    • Are slow to start saving,often due to competing expenseslikestudent debt, and miss the benefits of compound interest
    • Don’t save enough oreffectively across their careers 
    • Face the challenge of financing retirements that now last for decades, due to longer lives 

    Between those Americans not saving and those not saving enough for retirement, we find ourselves approaching a crisis. Increasingly people are retiring into bankruptcyiii and homelessnessiv, trends that inaction will amplify, leaving generations unable to retire with dignity and putting our country’s economic and social fabric at risk.

    Every day that we fail to act is another day Americans falter in saving for the future. Fortunately, on May 23rd, the House of Representatives took a significant step forward to address the elements of this crisis by passing the Setting Every Community Up for Retirement Enhancement (SECURE) Act by anoverwhelming margin of 417-3. While the SECURE Act will not solve every issue facing workers saving for retirement, it does provide solutions for:

    • Extending savings plan access, specifically to workers of smallemployers, those employersthathave struggled to provide affordably a retirement plan for their employees. 
    • Increasing automatic plan options to escalate employee contributions, intended to seamlessly boost savings and enhance outcomes.
    • Clearing obstacles to offering lifetime incomeoptions in 401(k) plans, to ensure a sustained income in retirement.

    Retirement security is a goal we should all work toward, and that is why we at State Street strongly support the SECURE Act. We urge the Senate to act expeditiously to pass the SECURE Actthis year - because working Americans cannot continue to wait for savings solutions.

    The time to act is now.

    Disclosures

    ssga.com

    State Street Global Advisors 1 Iron Street, Boston, MA 02210. T: +1 617 786 3000.

    The views expressed in this material are the views of Ronald P. O’Hanley and Cyrus Taraporevala through the period ended September 13, 2019 and are subject to change based on market and other conditions. This document contains certain statements that may be deemed forward-looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected.

    All information has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. There is no representation or warranty as to the current accuracy, reliability or completeness of, nor liability for, decisions based on such information and it should not be relied on as such.

    The whole or any part of this work may not be reproduced, copied or transmitted or any of its contents disclosed to third parties without SSGA’s express written consent.

    © 2020 State Street Corporation. All Rights Reserved.

    2704302.4.1.GBL.RTL

    EXP: September 30, 2021

    Footnotes

    i Government Accountability Office, “Retirement Security: Low Defined Contribution Savings May Pose Challenges,” May 5, 2016.

    ii Employee Benefit Research Institute,“Retirement Savings Shortfalls: Evidence from EBRI’s 2019 Retirement Security Projection Model, March 7, 2019

    iii Consumer Bankruptcy Project, “Graying of U.S. Bankruptcy: Fallout from Life in a Risk Society,” November 8, 2018.

    iv United States Department of Housing and Urban Development, “The 2016 Annual Homeless Assessment Report (AHAR) to Congress,” December 2017.

    This information is for informational  purposes only, not to be construed as investment advice or a recommendation or offer to buy or sell any security. Investors should always obtain and read an up-to-date investment services description or prospectus before deciding whether to appoint an investment manager or to invest in a fund. Any views expressed herein are those of the author(s), are based on available information, and are subject to change without notice. Individual portfolio management teams may hold different views and may make different investment decisions for different clients. There are no guarantees regarding the achievement of investment objectives, target returns, portfolio construction, allocations or measurements such as alpha, tracking error, stock weightings and other information ratios. The views and strategies described may not be suitable for all investors. SSGA does not provide tax or legal advice. Prospective investors should consult with a tax or legal advisor before making any investment decision. Investing entails risks and there can be no assurance that SSGA will achieve profits or avoid incurring losses.

    Performance quoted represents past performance, which is no guarantee of future results. Investment return and principal value will fluctuate, so you may have a gain or loss when shares are sold. Current performance may be higher or lower than that quoted.  

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