REMARKS OF MARC E. LACKRITZ
President & Co-CEO
SIFMA Savings & Retirement Symposium
Thursday, March 1, 2007 8:00 a.m.
Welcome to SIFMA’s first Retirement & Savings Symposium. I say first, of course, because the Securities Industry Association, which held this conference annually, merged with The Bond Market Association last year to become the Securities Industry and Financial Markets Association. So, this is the first of what we hope will be many more annual SIFMA Retirement & Savings Symposiums to come.
Before I introduce today’s keynote speaker, I want to thank everyone on the Retirement and Savings Committee for all your efforts to enact the Pension Protection Act of 2006 last year. This was a complex, multi-year, cooperative effort, bringing together the retail and institutional interests of our firms. We appreciate the significant investment all of you made in response to our requests for information, conference calls, and emails at all hours of the day and night. And I particularly want to thank Liz Varley, SIFMA Vice President for Retirement Policy, for driving, shepherding and leading the effort to enact the Pension Protection Act.
We achieved many of our industry’s legislative goals in 2006: laying the groundwork for more investment advice by qualified professionals, making permanent the 2001 contribution limit increases and enhancements, and modernizing a number of ERISA’s outmoded provisions.
Even though we have accomplished so much legislatively, we still have much more to do to solve the problem. Indeed, as the industry that manages the accounts of millions of investors, we have an even greater imperative to help people save for financially secure retirements. As such, SIFMA’s Board of Directors has made retirement policy a top priority for the Association. We recognize that managing retirement products is a major concern for our member firms and that we, as an industry, must stay engaged in the policy debates in Washington, DC. Here’s why:
- Since April 2005, the personal savings rate in America has been negative – a phenomenon that hasn’t occurred since 1932 and 1933, during the Great Depression. The newest figures released last month show a rate of –1% for 2006, compared with – 0.4% in 2005;
- More than 43% of Americans are not saving at all, and only one-third of Americans are saving enough to maintain their standard of living in retirement according to SIA’s 2006 Retirement Savings Survey;
- Many 40-year-old and up Americans don't feel so prepared for retirement, according to an AARP study. 28% of workers and 12% of retirees are not confident about having enough money in retirement to pay for their medical expenses, for instance.
- Many Americans – regardless of their age, gender, household income and education – admit they are not saving seriously for retirement, according to Allstate's 2006 "Retirement Reality Check." In fact, 38% of those surveyed say they expect their retirement to be "financially difficult."
Against this backdrop, what can we do? First, we all need to start “thinking outside the box.” Public policy, education, and cultural forces all have to converge to change our behavior to address this crisis. There are many policy programs and tax-favored programs to encourage retirement savings. And yet the problem still persists. Policymakers can do more to help increase retirement savings. For example, expanding pension coverage for small business and easing the burden of paying for health care in retirement would help tremendously. And we must broaden our education efforts to encourage and educate investors to take more responsibility for their own financial futures.
SIFMA has continued our legacy organizations’ rich history of commitment to financial and investor education and literacy programs. We run several educational websites for adults at all levels of investing experience, including Path to Investing, tomorrowsmoney.org, and investinginbonds.com, in addition to publishing a broad range of brochures to address specific investment issues.
We also sponsor the Stock Market Game, a simulation in which teams of students in grades four through 12 learn the fundamentals of investing through a hands-on experience investing a hypothetical $100,000 in real securities; InvestWrite, a national essay competition to complement the SMG program; and the Capitol Hill Challenge, a national version of the Stock Market Game where members of Congress sponsor teams in their districts and/or states and the winners earn a trip to Washington, D.C. to meet their elected officials, and to see first-hand how our national economic policies are developed.
So to close, thank you for being here, and thank you for what you do. I look forward to hearing how we can all work more effectively to improve our country’s retirement savings.
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