Championing Retirement Opportunities to Boost Communities Across America
Oct 16, 2024 10:10AM ● By Randee Brown
Comprising five retirement industry associations and 35,000 individual members, the American Retirement Association works to educate retirement plan and benefits professionals and advocates for policy to support the possibility of a comfortable retirement for all working individuals in the US.
In 1974, the federal government passed the Employee Retirement Income Security Act which sets minimum standards for most private voluntarily-established retirement and health plans to provide protection to plan participants. As a 501 (c)(6) nonprofit organization, the ARA performs advocacy work at the state level for each of these sister associations — American Society of Pension Professionals & Actuaries, the American Society of Enrolled Actuaries, the National Association of Plan Advisors, the National Tax-deferred Savings Association, and the Plan Sponsor Council of America — with a mission to help laws be most conducive to the end user and ensure participants have the best access possible.
The sister organizations each touch a different area of retirement planning, operating individually while coordinating under the ARA umbrella. According to ARA’s Director of Federal and State Legislative Affairs Nathan Glassey, symposiums, summits, and conferences held throughout the year help the ARA provide credentials and education on how to run plans, how to work as a plan advisor, and what to do as an actuary.
“What we’re doing is educating them on the basics as well as any policy changes,” Glassey said. “Right now, the biggest topic is the implementation of Secure 2.0, which is a huge federal legislation that affects all retirement plans everywhere in one way or another. There were about 93 provisions in that bill, so we are teaching people how to implement and work with these new rules.”
Glassey said it’s important for ARA’s members to understand Secure 2.0 and how to move forward, especially because there is already talk of Secure 3.0. His advocacy goals are to make sure that new provisions will help retirement plan participants save as much as they can in order to be secure in their retirement.
Other major topics of discussion are correcting anti-401(k) rhetoric circulating in some industries, and educating legislators how important it is for individuals to have a workplace-based retirement plan.
“New provisions have created an opportunity to close a huge coverage gap,” Glassey said. “More than 50 million employees in this country do not have access to a workplace-based retirement plan, meaning their employer does not offer a 401(k) plan or similar. Individuals are 15 times more likely to contribute to their own retirement if they are offered a workplace-based retirement plan, and now it’s possible for small businesses to offer plans with provisions that help cover costs.”
Some states are implementing mandated IRA plans, meaning the state sets up a plan for participant contributions, and every employer with five or 10 employees, depending on the state, must either have a 401(k) or an auto-IRA plan in place. The benefit is more workers have an opportunity to contribute to retirement savings, though some businesses do not like having mandates in place.
“One of the things we try to help employers understand is that attracting talent is challenging without the offer of a retirement plan,” Glassey said. “It can cost nothing to set up a formal 401(k) plan, can help people work towards retirement, and can help regarding business taxable income. It’s a two way street that can support the employer and the employee, then hopefully retains talent in small businesses.”
Ensuring working individuals have the ability to successfully retire will result in positive long-term effects for communities. Retired individuals who are active in their communities, including through volunteerism, must be able to live off of their retirement savings. If retirement funds begin to run dry, some retirees may have to go back to work in a market that does not have enough jobs for those older workers and younger individuals just entering the workforce. With too few jobs available, more people may need support from federal and state governments, which then puts a strain on the economy.
“We need to find a way to ensure people can retire at the age they’d like, and in a way they can do so securely and successfully,” Glassey said. “We must work together to bolster what people can do to save for that retirement, live happily, and contribute to their communities in a positive way.”