CAP Senior Fellow David Madland delivers remarks for testimony before the Maryland House of Delegates. Read the full testimony (CAP Action)
Thank you for inviting me here today to discuss the Maryland Secure Choice Retirement Savings Program.
My name is David Madland and I’m the Director of the American Worker Project at the Center for American Progress Action Fund, an independent, nonpartisan, and progressive education and advocacy organization dedicated to improving the lives of Americans through ideas and action.
I appreciate the opportunity to present my views on this important topic, a topic about which I have been researching for some time. I have written extensively in academic and popular publications about retirement policy, and am also the author of a proposal for a new private-sector retirement plan type called the Collective Defined Contribution, which shares many features with the proposal in front of you today.
In my testimony I will discuss the many problems of our current private-sector retirement system and how the proposed Secure Choice Retirement Savings Program would help alleviate these problems.
Social Security provides an essential baseline of income for retirees, and must be strengthened to ensure that it continues to do so for generations to come, as the Center for American Progress has proposed. However, Social Security was only intended to be one leg of a three-legged approach to retirement savings. Employer-sponsored retirement plans and individual savings are supposed to be the two other legs.
Unfortunately, the private-sector, workplace retirement system is broken. As the first generation to rely primarily on 401(k) plans begins to retire, we can see the cracks in the system. Boston College’s National Retirement Risk Index estimates that 53 percent of households are at risk of having an insecure retirement, meaning they will be unable to maintain their preretirement standard of living.
And the public has recognized this and are deeply concerned about their ability to retire. Fifty-five percent of Americans are very concerned that current economic conditions are affecting their ability to achieve a secure retirement, according to a new report by the National Institute on Retirement Security released last week. An additional 30 percent are concerned—meaning that 85 percent of Americans are concerned about being prepared for retirement.
The current system is failing in a variety of ways including a lack of coverage, high costs, and high levels of risk for savers. I’ll now turn to each of these issues and discuss how the Maryland Secure Choice Retirement Savings Program and similar plans, such as CAP’s collective defined-contribution plan, would alleviate these problems.
CAP Senior Fellow David Madland delivers remarks for testimony before the Maryland House of Delegates. Read the full testimony (CAP Action)