To the 45th President of the United States

From: Bob Reynolds

Dear 45,

From the moment you lift your hand from the Bible at your inauguration, the American people will look to you for leadership to restore their shaken faith that our government can truly work “for the people.”

One of the most promising ways to do that would be taking on – and solving – America’s retirement security challenge. Working Americans routinely cite concern about their retirement futures as their single greatest worry. The good news is that as our new president you can meet this challenge on a bipartisan basis and help spur stronger economic growth in the process.

Having spent over three decades building up America’s workplace savings system, I can assure you that the pathway to meeting this nation’s retirement challenge is clear. The challenges are not intellectual – they are political. That is why we need your leadership.

The first step is to work with Congress to make Social Security solvent for the long term. To be politically feasible, this reform must include both benefit adjustments and enhanced revenues and it must not hurt low- to moderate-income workers.

This grand bargain can only happen if our new president takes it on – with passion, vision and flexibility. Action is urgent. You will have a brief “window” to act on this challenge, and delay will only make solutions tougher and more painful.   

Social Security solvency should be matched by a drive to strengthen and expand the private workplace savings system. This system – 401k plans and the like – is already enabling tens of millions of workers to save for their retirement futures. But this great success story does need strengthening.

The best path to positive change would be to focus on what is already working well in today’s workplace savings plans – and extend that coverage to all. It will be possible to work with Congress to find ways to extend workplace savings coverage. The goal should be securing access to on-the-job savings for every American who pays Social Security tax. Closing this “coverage gap” will put millions more workers on track to security.  

You should also work to spread the best practices seen in today’s successful retirement plans to every workplace plan in America. Experience shows us – beyond doubt – that plan designs that automatically enroll all workers and raise their savings to 10% or more get the job done. Such plans are already helping tens of millions of workers today to move towards the system’s ultimate goal: secure incomes for life. Because they are automatic, such plan designs make success easy – and failure hard. And proven success should become America’s retirement savings model.  

These basic changes – a solvent Social Security system plus universal access to well-designed workplace savings plans – would dramatically improve all Americans’ retirement security. Imagine the positive impact on Americans' faith in their government – and in ourselves. And there would be other incredibly valuable benefits, too.

By directing the retirement savings of millions more citizens into America’s capital markets, we would assure all working Americans a real stake in our free enterprise system. Workers themselves would provide the capital needed to support more entrepreneurship, job creation and more rapid economic growth. Personal solvency would strengthen national solvency.

So don’t think of retirement policy as only a challenge. Think of it as a great opportunity.

With your leadership, we can transform a source of worry into an engine of American prosperity – and renewed national pride.

Sincerely,

Robert L. Reynolds
President and CEO
Great-West Financial and Putnam Investments