Business and Retirement Income – What Role in the Future?

Anna M. Rappaport
President, Anna Rappaport Consulting

I have been very pleased to spend the last few days in Washington, DC and to participate in several meetings about retirement security. On Wednesday, June 17, I joined a group at the National Academy of Social Insurance at “The Quest for Adequate Retirement Income” a symposium focusing on current issues in the retirement system.

On Thursday [July 18th], I had the opportunity to meet with a number of plan sponsors who were discussing challenges in the retirement income system from their perspective. These large organizations were interested in providing retirement security to their employees, and frustrated at what often seems to be a stream of endless roadblocks.

What I heard from the two sets of people presented a very sharp contrast. At NASI, there were no representatives of the business community and none of the presenters had lived through the challenge of operating pension plans. Further, when asked what business thought about the issues and whether the financial crisis reinforced the importance of DB plans, the response was that business was not interested in offering this type of benefit. I was very frustrated to hear this from a researcher has not been a part of the discussions in the business community. The correct answer should have been to talk to someone in the business community and get their views. While this might seem difficult to an academic or policy person not in touch with benefit managers, there are ways to access this information.

There are groups that represent plan sponsors in Washington and provide business perspective to Congress. They include the ERISA Industry Committee and American Benefits Council. There are also groups that represent public sector plan sponsors. Another way to gain insight on business perspectives is to talk with consultants who work with plan sponsors. One of the great values of NASI is that it brings together people with diverse viewpoints.

Employers have long been an important part of retirement security in America. My view is that many employers have worked for a long time to protect employee security, and that they have endured many roadblocks. The success stories are hidden from view while failures are the focus of the news. How many more roadblocks they are willing to face is not clear, but we reduce the chances if we make it more difficult for them. It is vital for other stakeholders to have a dialogue with the employer community, and not to just make assumptions about it.