Addressing the 2020 NAPA D.C. Fly-In Forum this week, two members of the House Ways & Means Committee shared their thoughts on how the economic stress caused by the pandemic has shined a spotlight on the need to better align retirement savings incentives.

“I actually believe, long term, the biggest issue for the United States is retirement security,” noted Rep. David Schweikert (R-AZ). “If you look at the U.S. demographics, we have so many of our Baby Boom population moving into their retirement years with not enough resources. Now that we’re in the pandemic here, with the stock market, the ability to round out those last couple of years of work may now be disrupted,” he explained.

“It’s an intense fear that I have that we have a big block of our population moving into its retirement benefit years and there’s great difficulty—you see it in multiemployer pension plans, now we’re seeing it in a number of single employer plans, let alone the financial stress that’s laying in Social Security and Medicare,” the Ways & Means Committee member added. As for how he thinks the issue can be solved and whether it can be done in an employer-sponsored way, Schweikert (at right) suggested that it’s going to have to be layer by layer.

“The employer-sponsored model is huge and we need to expand it. And we need to actually put in more incentives, particularly even for very small employers to be able to do more of that,” he noted. Schweikert suggested that the hope has been with technology, resulting in the cost of offering these plans coming down and making it simpler to offer a plan.

He pointed to further incentivizing auto-enrollment features for small employers as another possibility. Schweikert acknowledged that some of these retirement policy incentives are expensive from a tax-collection standpoint, but emphasized that providing the incentives today will reap rewards in the future, not only with respect to capital stock, but with individuals and families having a nest egg in the future.

“I’m hoping now with the amount of economic stress and the number of Americans thinking, ‘Oh god, what if I had to retire this coming year, what does my world look like?’ that stress helps us come together and provide these incentives,” he observed.

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