U.S. Senator Mike Enzi, R-Wyo., chaired a Senate roundtable today with expert witnesses to explore what efforts are being made by the government and private sector to ensure people have the financial literacy they need to save for retirement.
“As mayor of Gillette, I remember seeing first-hand the power that individuals have over their finances when purchasing a home and the impact that that transaction could have on a family and a community,” Enzi said. “The reality is that in the time since I was mayor, people’s personal finances have only become more complicated. Financial literacy, just like standard literacy, is fundamental to successfully navigating our world, and yet we appear to be failing in our efforts to expand this knowledge.”
According to an employee survey published by PriceWaterhouseCoopers, an accounting firm, nearly half of baby boomers had $100,000 or less set aside for retirement, an amount that may be expected to yield $4,000 in annual cash flow.
Enzi, as Chairman of the Senate Subcommittee on Primary Health and Retirement Security, emphasized how the lack of retirement planning by Americans at all stages of life illustrates the need to explore the resources already available to individuals from employers, benefit providers, non-profits, third parties and the federal government, along with how they those resources can be improved.
The hearing featured testimony from the U.S. Treasurer Jovita Carranza, who is tasked with leading the Trump Administration’s government reform and reorganization effort as it relates to financial literacy programs. According to Carranza, the Administration has found that approximately $250 million is already spent across 20 federal agencies providing separate financial literacy programs.
Enzi also emphasized the potential retirement security benefits that Congress could create by allowing Open Multiple Employer Plans (MEPs), which would allow independent contractors and smaller business to join together to take on the administrative burdens and responsibilities of managing a retirement plan.
“We are huge fans of the multiple employer plans,” said Lynn Dudley, another witness at the hearing and Senior Vice President for Global Retirement & Compensation Policy at the American Benefits Council. “The reason we are is because we believe it will reduce costs and make it easier to have access; not only for small employers but also individual people who have multiple jobs who could treat themselves as self-employed and participate. We have a lot of companies that are poised to provide multiple employer plans including financial education, financial tools and basic budgeting information to work with people that are participating in multi-employer plans.”
