integrity and devotion to the constitution. keep writing, keep speaking, keep the unrelenting effort to get a hearing because if we get the hearing we have had judge. god bless you all and may god orlando our troops. >> next, cabinet secretary outline their plan to help incarcerated people reunite with society. and then a look at the retirement plans for americans and after that a look at the pension act. now attorney general loretta lynch and the secretary of housing, labor and education talk about challenges forcing formally incarcerated people when they reenter society. this is an hour.

[applause] >> good morning and welcome to the center for american progress. my name is carla martin. i'm the the vice president for policy. it is my honor to welcome to this exciting event. our lineup today is a real testament to the importance of this issue to this administration and to president obama. nearly one in three americans has some type of criminal record that creates barriers to employment, housing and many other pathways to opportunity. some americans with criminal records are even barred from casting a ballot which denies the right to participate in our democracy after they have paid their debt to our society. the impact of these barriers goes beyond those previous convicted of a crime. criminal records are a family

sentence. in fact, they have found that nearly half americans children now have a parent with a criminal record. study after study has shown that the barriers associated with the parents criminal record can severely limit the child's opportunities and lead to worse life outcome. by eliminating these barriers and providing the right tools to people with criminal records, we can dramatically increase the likelihood that they will remain crime free and we can put stability and success within reach for them and their families. at cap we continue to raise awareness about these issues. we have joined groups across the political spectrum to push for meaningful reform through a criminal justice system. we have been lucky to have such a steadfast partner and president obama. over the last eight years, the obama administration, including our forecast this morning have led in a new direction on criminal justice issues. over the course of his two terms in office, president obama has granted more commutations than the past four presidents combined. in 2013, the department of

justice launched the smart on crime initiative to promote fair initiative of our laws and work with local and state law enforcement agencies to build trust in our communities and o develop smarter and more efficient tools for ensuring public safety. this morning, the administration is announcing more important steps to support the reentry of incarcerated individuals and help ensure success for their families. this work is far from finished. our broken system continues to devastate communities across the country. critical legislation like the sentencing reform in corrections act remain in limbo on capitol hill. every day the congress fails to take action more american families are swept into a vicious cycle of poverty and mass incarceration. with bipartisan support on these issues, we have a unique window of opportunity to make

meaningful progress and ultimately build a fairer and more effective justice system for all americans. it's a privilege to be joined this morning by four of our nation strongest champions for criminal justice reform. attorney general loretta lynch, secretary of labor tom perez and secretary of housing and urban development leon castro and john king. their leadership has been critical to the administration mission and we are honored to have him on the panel. the conversation will be led by darrell akin's and peer he is an advisor to the second chance portfolio of the bureau assistant peer he is a member of the federal interagency council and the first ever second chance fellow at the u.s. department of justice. prior to joining doj he focused on criminal justice reform issues and in 2014 he was honored as a champion of change at the white house. we are thrilled to have all of them here today so without

further do please join me in welcoming them. [applause] >> thank you for that warm introduction. i want to thank the folks at the center for american progress for hosting this very important conversation. to say that this is a surreal experience for me would be an understatement. sitting on the stage with for cabinet level officials talking about these important issues is a bucket list moment, if you will, for me. what really grounds it and makes it more surreal for me is that 20 years ago i couldn't of envisioned having this conversation you all. i was beginning to serve a ten year sentence in the alabama department of corrections for first-time nonviolent drug violation peer i went into the department of corrections with the high school diploma and i came out with the high school diploma. the state of alabama wasn't as

progressive as some states in post secondary education. i languished for three and half years. torch not enough for me i had a loving family to return to who wrapped their arms around me and offered me food, clothing and shelter to help make some rational choices. i went back to school to get my education and get my law degree. i developed a practice area that exclusively focused on the restoration of the human and civil rights where people would be in contact with the system. now i get to's share the stage with you. it has really been a remarkable journey but i really want to emphasize that i don't consider myself at exceptional at all. the only thing that separates me from the over 600,000 people that are released every year from state and federal prison, the other ten to 12 million who cycle in and out of our local county jails and the over 70

million people with criminal records is that i had access to extraordinary opportunities. opportunities to be able to succeed and remake my life. what we are about to talk about today is this depth but your agencies are taking to expand those opportunities so more americans have more success stories. let's get to it. i'm going to start with the attorney general, my boss and we know that prisoner reintegration,reduction of recidivism is a multidimensional issue. not only do people need access to employment but they need somewhere to live, they might need identification, they might need connection to mental health so they can stay on top of their medication. these needs span multiple agencies. how has federal inter- agency

facilitated cross agency collaboration and how will that continue once there are new people in your seats? >> that's an excellent question. i thing it really goes to the core of what reentry is all about. one of the things that those of us at the department, whether we are working out in the field, have long realized that the impact of the justice system on individuals was a multifaceted layer. therefore when we talk about reentry the response needs to be multifaceted and multilayered. a lot of us started out looking at these issues years ago when i was a u.s. attorney under janet reno. this was a huge priority of hers and we looked at it from a position of what can the justice department do. while there is a lot that we can do, the impact of what we have already set in place through incarceration and other measures really extends far beyond the

purview of justice. the reentry counsel has been a successful collaboration in washington and i think it's because, it's a group of agencies, and i'm proud that the agencies on the stage are represented as well as others, they have put aside their main desire to be the leader and said what can we do together. how can can we look at the impact of the criminal justice system on individuals in a multifaceted, multi- layer role and what can we do can to impact that? what are some basic things we can do to move reentry down the line and make it real for people it's a combination of agencies who use both their convening power, their policy power, frankly the power of the thoughts and instincts of all the people who work for us here

at our connections to the field and it's been a very, very successful collaboration. some of the things that have come out of this are just talking about the barriers to reentry and what are literally the logistical issues they are. with respect to finding a job, everyone agrees finding a job is one of the highest barriers to having successful reentry life. someone has to really be able to come home and integrate in this society. when you talk to individuals, and one of the main complaints that people have, and we've had this discussion for years is just that inability to get in the door. the inability to even get in the interview and maybe you'll get the job and maybe you won't, but the ability to compete for it, in order to compete you have to be allowed in the arena. you have to be allowed in the room. so out of that, the eeoc has proposed the band the box initiative as a best practice

and something that the federal government has been tremendously proud to lead on in this and we hope that that will be something that will be adopted not only statewide but also throughout a number of industries. a number of industries have signed the pledge to do so. that has been tremendously helpful. so gathering all of that thought has really invigorated the discussion. it certainly has given me tremendous inspiration when i talk to sec. perez about how we are going to get worked up and running for people and i talked to sec. castro and king about education. also looking at some of the things you've done over the years, looking at these issues, my predecessor wrote to every state governor and asked them to think about the collateral consequences of incarceration. i was most tremendously proud to write a letter to all the governors during reentry week and focus on the state identification issue. that's one of the things that the reentry counsel outlined as

a real problem. again, through this collaborative process, the ways to solve that and it's one of those things where you think wide and people think of this before. it's one of those things that once it gets up and running, it's so successful in the idea that what we need to do is get federal prison ids either exchange for state ids or let them be part of the process in obtaining state ids but that's a tremendous barrier to reentry. if we don't have read identification, you you can't get into a government building. you can't get many government services. you can even get a library card if you can't show who you are or even where you live, for example. all the little things that people take for granted generate tremendous obstacles for people who are coming out of the criminal justice system. as you mentioned, in particular, individuals who may not have been incarcerated but have been through the system in some way. they're less visible and so it's

really a pervasive problem. we are getting a very positive response on the issue of allowing the federal ids to be used either as state ids or as part of the process. it's something we are looking forward to doing more initiatives like that on. it has been an incredibly positive collaboration and i'm glad that president obama made it a standing federal level initiative. it will live on this administration primarily because the force of the thought behind it are not going to be stopped. they are absolutely not going to be stopped. we are at a point where the numbers alone tell us that the numbers of people coming out both federal prison and state prisons but all of those numbers are people. they represent a real person. we are at a point in society where many of us are going to know individuals who had contact with the criminal justice system either through our work, through our friends, through our through

our family and we are going to see firsthand the challenges that they face. i think this initiative won't stop because of the thoughts behind it are not going to stop. >> thank you for that. sec. perez, i'm coming your way. part of the mission of the department of labor is frankly to put people to work. we know that people who have had contact with the criminal justice system, 7,070,000,000 americans, that's one in three adult americans have either an arrest or conviction record associated with their name. this can present tremendous challenges to being employed. what steps are the department of labor taking to help these people have a fresh start and get back to work? >> i certainly believe one of the best ways to reduce recidivism is to give people the skills to compete when they are coming out of prison and get them a job right away. so one of the major tools that we use at the department of

labor is our grantmaking facility and we've been doing that's in a much more coordinated fashion. i think one of the things that the president said from day one, some of the most challenging problems confronting america require for the effective and sustainable resolution unprecedented levels of interagency collaboration. we've imploded and we have one big standby. and it's a standby of opportunity. just yesterday we announced $54 million of grants and they are going to various organizations, some are recognizable nonprofits like goodwill and some are local workforce systems, community colleges, some are going to help adults and some are going to help juveniles. they are all predicated around the principle of partnership and making sure that we are all in this together so we can build upon models that we know have already worked in communities across this country to make sure that people have the opportunity to succeed. another aspect of our grantmaking is that we have been

growing and yesterday we awarded more grants to this effect and that is to build one-stop employment centers. i had the pleasure of serving a local government in montgomery county maryland. we were one of the first in the country and if you talk to the warden, it was a win win because it made the jail safer because we were able to put people, give people opportunities. you said if you went into jail with a high school degree you came out of jail with high school degree. that's not happening in montgomery county. we are upscaling people and giving them access to opportunity and this program has taken off. we now have over 30 jurisdictions across the country who are interested in this. our grantmaking authority has been a very important part. a pulpit is also important

because there are so many employers out there who understand that hiring people with a criminal history is not an act of charity. it's an act of enlightened self interest. if you go in marilyn, the largest private employer is john's hopkins. it's very good university and a great hospital to state the obvious. it's the most prolific employer of folks with a criminal history as the soon to be retiring president was here, he would tell you that it is an act of enlightened self interest. it is not an act of charity. he will tell you they have measured this and folks who have a criminal history working at hopkins stay longer and by the way, there up and down and all around the echo system, x-ray test, phlebotomist, health professionals, health professionals, all around the food chain and it is the right

thing to do and it's the smart thing to do. a big part of what we are doing is lifting up these employers who are doing well and that in turn helps other employers who are thinking about it. they have issues. when they have those questions, we are always nonjudgmental. we here here periodically, this person has a conviction for theft. i'm a little bit worried about hiring him or her. guess what. we have a toolbox in our workforce system put we have a surety bonds. we will insure you against that risk if something happens. we don't think it will happen. so the workforce system itself has built a lot of tools because i firmly believe and one of the basic tenets of workforce development in this country is you take the job seeker where you find them. we have a lot of people who have daycare barriers to employment. we provide daycare. transportation barriers and we

need people who have a criminal history and we take them and we've had great success. i've said this when i was coming in. we are a nation of second chances. and i firmly believe in second chances. i must confess that i have a very serious ambivalence about the use of the term second chance because i have met so many people who have your story and for so many of him, there really, really wasn't a first chance. so i continue to noodle over what we call this because it really, and so many cases, the work that we have been able to do in baltimore city, we need to do reentry of scale because so many people haven't had a meaningful first chance and that's what we need to continue doing. >> thank you for that. secretary castro, you heard in my story the critical role that stable and secure housing played

in my reentry trajectory. many people struggle with that. particularly folks who may have suffered abuse or behavioral health issues. they are falling in chronic homelessness and end up in a number of crisis whether it's emergency room, psychiatric hospitals or jail. that has a huge huge human toll on them individually and a huge public cost. one practice that we have found to be successful is permanent supportive housing. can you detail some steps that hud is taking in amplifying permanent supportive housing? >> absolutely, thank you darrell for moderating this and kudos to you for the example that you have set. also for using your talents and your experience to motivate others to make their lives productive and make the most of

that second chance. to all my colleagues, particularly when it commands our attorney general for fantastic work leading the reentry counsel. what you see here, and i think a secretary has mentioned as well, what's happening in the obama administration in an unprecedented way has been this fantastic across-the-board collaboration that i think answers your early question of what will be your lasting legacy of this administration. so we believe that housing is a vital part of an effective second chance in life. what you here are two things, number one that all these things are connected, that's obvious

but secondly, what you see out there in the united states is that there is a cycle that develops with people. folks who have been involved with our criminal justice system and that are reentering are at higher risk for homelessness and also at higher risk for getting back into the criminal justice system. the question becomes what are the policies that we can put in place in the investments that we can make that will put them on the right path and help them avoid either becoming homeless for getting back into the criminal justice system. there are two policies that we have seen in the housing realm that work particularly well to that end. one of them we are excited that we have a joint announcement today with our attorney general and the department of justice and that is on supportive housing. we have something called our paper success, permanent supportive housing demonstration.

basically, it says two things. number one, we have seen that the best way to avoid homelessness is to put people in housing. it's called housing first. not to make them jump through hoops and be in a shelter for so many nights or something else. get people into housing because that helps stabilize them if they are dealing with other issues. if they have an addiction or mental illness or some other condition, if they need a job, it stabilizes them. secondly, it's to give them quick access to the wraparound services and this is the supportive housing model. to get into housing that gives them access to wraparound services so they are more likely to get the help that they need to get a job, to deal with a health issue or a mental health issue and ultimately to put them on that path. this is a special grant we believe because it is a paper success model. that means we are getting it out there in innovative ways that we

can do this. at 8.7 million we are proud to make this investment and see what we find that can then be replicated in other places in the country and ultimately be able to measure with more precision because this is always one of the challenges for us on policy, if you would ask anyone of us in our department is how do you actually measure what works so that you can do more of that and put your money there and get the biggest being for the buck. i think it holds high hope to be able to determine that and for us, i think what we want to see ultimately is that we get a greater and greater percentage of folks that are reentering to

avoid homelessness, that avoid recidivism and get onto a productive path in life and that's why, when i started, you are great role model for that. your success story is what we want to see in so many more americans so we are proud to do this. >> thank you. secretary king, during my story i highlighted how going back to school and pursuing higher education really changed my trajectory. when i think back, i have to acknowledge that there was a missed opportunity. for three 1/2 years i didn't get an opportunity to pick up a book a book and pursue postsecondary education while i was incarcerated. what steps have the department of education taken to make post secondary education available to people who are incarcerated? >> thank you for the question. i want to thank my colleagues for their leadership on this issue and also think many of the community organizations that are represented who have been working at this a long time and

have been our partner in trying to expand educational opportunity for folks who are incarcerated or leaving incarceration. i think you're exactly right, that you're not being able to take courses what you were in prison was a missed opportunity. we see that all across the country and we have to acknowledge that the federal government made a mistake in the mid- 90s during the period of time when we were in a rush to mass incarceration. we made a mistake and congress chose to deny access to pell grants to folks who were incarcerated. without access to pell grants, we know the cost of higher education becomes prohibited. many programs that were offering educational programs on university campus, they shut those programs down in mid- 90s. so, we have been very concerned about this issue and have experimental authority under the higher education act to be able

to restore access to pell grants as part of an experiment together as evidence around what works in higher education for folks who are incarcerated. the attorney general joined secretary duncan and me last year in maryland to announce that we were going to conduct what we call our second chance pell project where we would allow universities to apply to be able to use pell dollars to support education for folks who were incarcerated. we know it has a huge impact on recidivism and it showed 43% reduction in recidivism. some of those programs are privately supported that are helping get bachelors degree and has seen recidivism rates as low as 2% in those programs because they are equipping folks with meaningful skills and opportunity. today, we are announcing the first set of universities that will participate in that second chance pell program. we have over 200 programs across the country applying. we aren't announcing 67

institutions that will launch this program and it will benefit 12000 students. this this is in 27 states per the cost of the program will be about $30 million a year which is about 1/10 of 1% of what we spend on pell dollars pitted doesn't have any impact on the other students who are benefiting from pell dollars across this country but it will create a path to opportunity. the president has also proposed in his 2017 budget that congress reverse the mistake that was made in the mid- 90s and restore pell access for folks who are incarcerated. to me this is really at the heart of the question of the second chance. if we do criminal justice reform just with sentencing reform we won't have done enough because we have to make sure when folks leave they leave with the education and skills and the opportunity to have a job and the opportunity to get housing and to get an id so they are able to be successful when they

leave and a second chance pell will help further demonstrate that and will help us to persuade congress to make a change in the law. >> thanks, that's excellent. i'm coming your way and last saturday we celebrated father's day. i'm a dad of two daughters, one of whom is here come on out and let everybody see you. [applause] that's moderators privilege, proud papa moment, she's 23 years old and graduated from college and is working at the committee for homeland security and is doing great. she was too when i went to she was two when i went to prison. for three and a half years the parent-child relationship was severed and even "after words", -- after words -- it took us a while to restore that relationship. there are many stories like that

all around the country. what is the department of justice doing to facilitate that parent-child relationship and bridge the gap on issues that children of an incarcerated parents face? >> i'm so glad that this is the part of this discussion because i think it illustrates perfectly the interconnected nature of all the issues that we are talking about and the core of what reentry really is is helping individuals return home and truly returning home means getting back to your family and going back to the community, rebuilding those bonds and it means strengthening our entire nation but the core of that, the core of community really is family. something something that we had seen the tremendous impact of these numbers of individuals who are incarcerated and going to the system, on families, we are at a point now where your daughters are not alone. about 2.7 million children in

this country have at least one parent who is incarcerated. i will tell you all so that when i go to prisons and talk to people, and i was so proud to go with former sec. duncan and announce the beginning of this pilot program, we talked with a number of inmates who were themselves taking college courses at the maryland prison that we were visiting and they were not able to take advantage of the pell pilot because it was still rolling that out. i will tell you that every one of those individuals talked about the impact of their educational program in prison and how that had an effect on their relationship with children that were still at home. both from a sense of supporting their own educational needs and being an example, but also in terms of helping them understand how to be a better parent in all of the things that are not in the books. the ability to connect, the ability to talk to your child,

the ability to communicate about these issues, the act of going through the educational process and essentially pulling yourself into a different realm was opening up avenues of connection between men and women in prison who have made the same comment. when we look at the cycle that we see, which also is sadly that a lot of the youth who are currently going through the system themselves are young parents or about to be, part of reentry is breaking that cycle. it is breaking the cycle and the connection. i was actually at an alabama institution during reentry week and i taught with a number of men there about their efforts to support educational employment and their concerns and every single one of them also talked about the need and the desire to be a better parent. one individual had a child who was also incarcerated in a different institution. the special challenges of

parenting someone who's going through the system also, the same challenges every parent faces of not being listened to but the special challenges of connecting someone who's going through an incredibly different difficult. as well. what we see is that will we help individuals rebuild those bonds of family, you do break that cycle. you do come out with stronger families. you come out with people who are connected to their kids and you have young people who can look at what their parents have gone through as an example and something to learn from but also something that they're able to avoid. that's the goal. were looking at a number of ways to maintain the peer physical connection that people have with their connection while they are cars rated in terms of making visitor centers more kid friendly and often times people are not near their families. there is a particular issue for

women who are incarcerated because there are fewer facilities that handle female inmates and depending upon the nature of the crime, they may be in a particular part of the country that can be very difficult. it's challenging. it's challenging for any parent. you incarcerated mother a mother and you almost incarcerated an entire family in terms of the impact on that family and the bonds that your break. we are working to improve the video conference facilities there and have those connections so people can have more regular communication with their children. it's something the female inmates talk about. it's something that children of incarcerated parents talk about is one of the most important things that you can do. just talked your parents. just have that connection. talk about the things that are going on, the educational programs that are going on in our institutions.

the examples that people can be while they are incarcerated. the drug rehabilitation program that are going on so children can actually see their parents working on things and working on issues. it does translate. we are actually announcing today a 1 million-dollar grant solicitation to develop further programs to model ways to keep families and children connected while the parent is incarcerated, called safeguarding children of incarcerated parents. we are looking forward to the ideas and the concepts and the plans that we know this group will generate and other groups will generate and we are always looking to do more. that is something we are very excited about. i think it really goes to the heart of this conversation that we are having. i understand what they are saying about the term second chance. when i look at all the re-entry efforts that we are doing, i realize what we are doing in many ways this helping people rebuild lives that they really weren't given an opportunity to fully develop before. these are the key central parts

of people's lives, your identity and who are you and who gets to tell the world who you are? your home, your heart is the home of everything. your educational system your educational system and the connection to your children. that is what sustains people while they are away from them for so long, i'm sure you had that feeling and that's what i think will help a lot of people get through the challenges of reentry, having someone that they are doing this for. i think it's something that's very important to the department of justice in terms of not only helping individuals truly come home but also breaking the cycle of individuals going back into prison or their children following down that path. >> thank you. secretary perez, your career has spanned both in the justice department and now the department of labor. how has some of your past professional experiences influenced the way that you approach your work at the department of labor? >> no disrespect to lou gehrig,

i feel like the luckiest person on the face of the earth because i have had the opportunity to work at the justice department at hhs and now the labor department and a week after i got to my current job, it was the 50th anniversary of the march on washington. that was a march for jobs in a march for justice. it was the sanitation workers and just because i pick up trash doesn't mean you can treat me like garbage. i am a man, i'm a woman and when i look at the discussion we are having right now, there is an undeniable economic dimension to it. there's a public safety dimension. there's also a civil rights dimension to this because you can't help but go to baltimore city or do trait or other places i've been to, los los angeles and see the racial overlay and this issue. that's why, when i was at at doj, one of the most impactful things that we worked on was we reached an agreement with the

shelby county juvenile justice system because if you are an african-american and a young kid you were something like four or five times more likely to be transferred to the adult system than if you were white. so we need to use every tool in our toolbox and we need to recognize a few things right now. number one, all of the dimensions of this problem, the economic dimension is simple. present company excluded, the population is aging. we have to understand that who is going to support us as we age. we need more people with w-2 income who are going to support us so there's the economic dimension. we can't leave any zip code behind in that effort. then there's the public safety dimension and everybody here has cited the overwhelming data that when you have these opportunities, you have a much higher chance of succeeding.

then there is indeed, the civil rights dimension that is undeniable here. i think it's really important for us and i recognize this and this is in response to your question. civil rights and labor rights and housing rights, there all about recognizing the moment and seizing the moment. i firmly believe that one of those moments is right here, right now now. i can't help but look out the audience and seeing some folks who have been in the trenches for decades. when i was working for senator kennedy 20 years ago, when i had hair and no replacement part, he is one of the most understated people you will meet, but he is a hero in this movement. mark and i played a lot of defense back then. but now we have to recognize that the this is a moment to play offense. there is a recognition, a bipartisan bipartisan recognition and it's the only tool in your toolbox, there's a hammer and pretty soon

everything starts looking like a nail. that was the philosophy that ultimately pervaded our criminal justice policy decades ago. now there's an understanding that we have to take a different approach. that's why when they did what they did for folks in public housing, that is a much more sensible approach. john king was pell grants. you are exhibit a of about a million exhibits that could be put forward. what the doj is doing with state and local prisons and internally at the bureau of prisons to make sure that the department is a model and what we are doing now, the unprecedented collaboration of the workforce system. we have to make sure, and i

commend for what you're doing to shine a light on this because if you lose sight of the moment in time then you lose sight of opportunity and i think there's a tremendous bipartisan opportunity. it's not that often when you have the likes of the coke brothers and folks all in between coming together around that vision. that's what civil rights is about. it's about the collective power of we. that's what labor rights is about. that's what moving the ball forward is about. that's what democracy is about. i think the collective power of we in this setting is capable of doing remarkable things in every zip code for all the good reasons that relate to the moral and ethical imperative in the public safety imperative in the civil rights imperative. that's why think it's appropriate we are all here and i speak for many others, we speak for many other colleagues who are on this team. it's an inside outside

collaboration. we know we can't do it without help. we know we can't do it without the businesses out there in the community colleges and the other partner spread the good news is everybody is all in. >> thank you. secretary castro. [applause] >> it has been fairly well documented the barriers that a criminal record history can trigger for people and trying to get work. it's becoming more and more well-known that the same barriers exist with regard to housing. recently hud put forth some guidance instructing housing providers on how they should evaluate contact with the criminal justice system in determining whether or not people should have access to housing. can you share more on that guidance to lay it out and maybe

some eyes or talk about how you anticipate that opening doors to housing with people were records. >> definitely. one of the things that we have the privilege of enforcing is the fair housing act. this is a very special piece of legislation because, for generations, it has truly empowered folks to ensure there is a level playing field out there when so many goes into the market and they are trying to buy a home or they are trying to rent an apartment. i wish i could say that even though it's the fair housing act of 1968 that we have made all of the progress that we need to make. we have not. one of the challenges we have

out there is that too often, when someone applies for housing, let's say somebody goes into the rental market and they want to rent an apartment. the box that you have to check says have you been convicted or arrested and if you check that, you're out. they will not even consider you. you have housing providers and landlords that are just taking a whole group of folks because they have an arrest record or conviction record and they're setting them aside and not allowing them that opportunity of housing. so our guidance, the the housing providers is that basically, they have to come up with a more tailored solution than that. it is not enough to just say you're out if you have an arrest or conviction. blanket policies like that don't have a place in our housing market. fundamentally, what we are

saying is that how are folks going to get an effective second chance if you won't even give them a second look? if you just toss them to the side right away now, within the policy, when, when you say that, right away landlords legitimately ask, what do you mean, i can't say no to someone with a criminal record? in the guidance we said no, that's not what were saying. were not saying saying that you cannot deny somebody housing because they have a criminal record or that you have to take anybody who has a criminal record, we are saying there has to be a legitimate reason for why you are excluding somebody. there is a difference between somebody who was convicted of theft 35 years years ago when they were young and somebody

that was convicted of murder or a more serious crime very recently. there's a difference between somebody who was arrested yesterday and somebody who has an arrest record from many years ago. folks have to tailor their policy to take that into account it's generated a lot of interest, it will be a very useful tool in helping to ensure that folks get that second chance and on top of that, we are not stopping there. i see that is somewhat reacting, and we are also trying to be proactive. again in collaboration with the department of justice, we are doing something called the juvenile reentry assistance program, j rapp and this is

$1.75 million of grants that are going out to 18 public housing authorities so that they can work with legal organizations in their locality to work with young people who are teenagers up to the age of 24 so so that they can expunge their record so they don't face this challenge in the first place. states have different requirements for what's expendable and what's not. we leave that up to the state, whatever folks are allowed to get expunged but at the end of the day, we are going to have more young people out there who have that effective second chance because of this work and throughout the housing market you have more americans who may have had arrest records or convictions but they are hard-working and are doing what they should do and they're going to be able to get that housing opportunity more than they were yesterday because of this work. we are very proud of this and

this is at the heart of creating more opportunity and more prosperity for more families. >> thank you. secretary, you talk about the secretary, you talk about the failed second chance initiative and how that will open up opportunities for people who are inside to be able to get access to postsecondary education. the incarcerated population represents a fraction of the total number of people who have had contact with the system, who also face many challenges to getting postsecondary education. i know this up close and personal. after i graduated with my junior college degree, i applied to one of our flagship institutions in the state of california and was denied. i remember the rejection and the exclusion that i felt, that no matter what i did i would never be able to overcome the stigma from my past. what is the department of

education doing to make sure people with records who may or may not have had an incarceration experience have access to postsecondary education? it's a great question. the university lost out. it was a bad decision on their part. what we are trying to do is call universities to be more thoughtful and the claims that they're making about the housing market, we have universities have questions about an arrest record or criminal record and the use it in a blanket fashion did not even consider an application. we created a toolkit for universities that we call beyond the box suggesting to consider how they answer that question. the university of california doesn't use that question at all at the initial stage. some are smarter about nearing the question to licensing areas where there may be collateral

consequences that prevent folks from getting a license and it's important to understand at the onset whether or not someone pursued in that field would be able to work in that field and they can ask a more narrow question. some universities, after they asked the questions make unreasonable demands of the student or they asked students to get a letter from the warden where they were incarcerated, no no matter how long ago it was explaining what their behavior was like while they were incarcerated. there are these obstacles that are created to enrolling students that actually harm the university. we created this guidance and we also created a pledge for universities to commit to move beyond the beyond the box. we continue to grow that effort. mayor garcetti from los angeles was actually with me to announce the beyond the box guidance at the event he said i think a bunch of other mayors should do

the same thing. i'm going to commit to bring together all the universities in the los angeles area to talk about this and move beyond the box. i'm going to encourage other mayors to do it. he already has 21 other mayors around the country who have committed to this. so leadership like his, we can make real progress and if there's a growing realization on the part of universities that they're missing out on extraordinary talent by having these arbitrary barriers. >> thank you. we have about three minutes left and i want to give my panelists an opportunity for rapidfire where they would like to see reentry from their agency perspective. i will start with the madam attorney general. >> we are actually moving toward that. reentry begin sunday one of a person's contact with the criminal justice system.

we are looking to make our bureau of prisons one of our strongest centers for reentry by strengthening the educational employment as well as the family connection opportunities there in. we feel it's an opportunity that we have to connect with individuals and give them the opportunity to take advantage of these programs so that when they actually cross that door and the gates closed behind them, they can can actually step into the workforce. they can find a home. they can move forward with their education. reentry begins with a one. >> scale and sustainability. we are sustaining our efforts across our agencies by making sure our career staff are working on these things so they can be carried forward. i think that is the internal dimension of what we are doing. the external dimension of what we are doing is what i often call the orchestra. we in this room, who are part of

this challenge, we play different instruments. they have the sentencing project and other folks at different places, we play different interest instruments but we are in the same orchestra. we need more players in the orchestra. it's the orchestra of opportunity. when we go and host events where hopkins of evangelize about why they do this and then you get other employers who are saying i want to join the orchestra, that is lightning in a bottle. so scale and sustainability, getting that orchestra to get more members. that's what it's all about. : how does it fit into what we are all doing the way that we've made this a priority, making this the priority of integrating it into that. secondly, for us to follow through. we can set out guidance. we can send that off to the world of the housing market but we really need to make sure there's enforcement and that we follow through so that this is meaningful opportunity for

folks. i think in the coming years if we can do those two things that will make a much bigger impact and we been able to make so far and making this a priority of integrating that. secondly for us it is foul proof. we can set out guidance and send that out into the world of the housing marth. -- market. i think if we can do those two things it will make a much bigger impact than we have been able to make so far as this grows. as this grows. show less text 00:54:06 unidentified speaker >> two quick points, one one is juvenile justice, place or we've

got to get much better at reentry. too often kids don't get quality education and don't >> i could do this all day. but we are at time and these busy folks have other important work to do. in closing i guess i would say i think part of my role in moderating this panel was to ground and connect the policy to the real-life experience of people who that contact with the system. i really want to besides the people part. african-american students are three times as likely to be suspended in pre-k and four times as likey in k-12. that is why the president is

focused on people of color and all students really. we are helping schools rethink discipline and making sure students are in class learning and getting the social and emotional support they need to be successful so we don't condemn to a harder life because of the choices we are making earlier in their life. >> i could do this all day but i will say in closing part of my role in moderating this panel was to ground and connect the policy of real life people and i want to emphasize the people part. when my parents came and picked me up from a maximum security facility they were not picking up a convict but their son and a

member of the family. all of these peoples are somebody's father, somebody's family, members of our american family and community. i think what we heard today is big important steps in opening the opportunity so everybody can pursue the american dream. >> thank you. >> good. great job. [applause]

[inaudible conversation] >> booktv has 48 hours of non-fiction books and argues every weekend. this weekend saturday, the annual roosevelt reading festival takes place at the fdr presidential museum in hyde park, new york. the festival included discussions about the 32nd president as well as histories of had the oval office. the book, under this roof and the white house and the press

presidency and 21 rooms and 21 stories. >> she's interviewed by william doyle, author of "american hunter." >> i think it's strange to

believe that the element of our gun culture that had the very most to gain by selling and promoting and celebrating their product is the very most invisible when we think about guns. instead, much of the political talk today is exclusively about interpreting the second amendment. the gun industry has become almost invisible many that history. >> on sunday at 10:30 p.m. eastern, marsha clark, lead prosecutor in the o.j. simpson trial, weighs in on the legal system and discusses her second career as a novelist. she's the author of the book, "blood defense." we spoke with ms. clark at the publishing industry's an ideal trade show, bookexpo america, in chicago. go to booktv.org for the complete weekend schedule. >> the aspen institute's financial security program hosted members of congress and investment experts to talk about retirement savings plans.

this portion is on increasing retirement savingsing in the u.s. it's an hour and 20 minutes. [inaudible conversations] >> okay, everyone, we're back. and we are moving into our final panel, remaining challenges, and things that we really got queued up in the last session. i'm just going to go ahead and for those in the room just, for those of you who have made greaves wardrobe -- grievous wardrobes errors, i'd encourage you to move forward and cuddle up for the rest of the session. that's one of the only solutions i can offer at this point. because as your digestion starts up, your temperature's going to be a little colder. but we're going to have a lively conversation up here, and so i do think that you'll be fine, and we'll get through it together.

so as jeremy set out before, the first panel really did look at what we accomplished, what was the path forward, what are some of the big buckets of unfinished business that the pension protection act started but potentially did not finish. and i'm here today with a second panel, a long panel but a fabulous panel, of folks who have different solutions to bring to the table that are going to address the different gaps that we just started discussing. so i'm going to quickly introduce just down the line names and titles, and everybody's going to have about eight minutes or so. there's a number of pieces of information that are slides, some of them have printed copies that were out back. we certainly would make them available for you if you're looking for them in the future. and at this point my phone is on not to tweet, but to keep time so we can have time for a robust conversation together. so, and we're in the order of

oppression, so -- of presentation, so first off we're going to have hearing from mark avery to my left, your right, senior adviser to the treasury. to his left, well, to his right is anne lester who is held of retirement solutions for global investment management at jpmorgan asset management. and i'll say a little bit more about them as we go through each thing. beside anne is jaime kalamarides, ceo of prudential bank and trust at the prudential insurance company company of america. welcome, jamie. and beside jamie is diane oakley. and last but not least is derek dorn who is head of regulatory engagement and policy at tiaa. so we're going to, first, hear

from mark who really, you -- i don't know that there's one person that encompasses more of the different experience with the different phases of reform and advancement of the pension system in america than you. very much part of the ppa as it came to be. and since then jamie -- mark has been incredibly essential in a lot of the other advances that have been made during the obama administration toward some of the gaps that we'll be discussing. so not only within the ppa, but the recent creation of myra, the expansion of automatic 401(k) features that have happened over the past decade, expanding retirement innovations at the state level is something he's been incredibly supportive and busy working on, promoting lifetime income and retirement plans, helping to facilitate direct deposit into roths and into tax refunds at tax time.

and so i'm going to just ask you to put your own reflections on the table, mark, and to talk about some of the solutions that you think are the most important ones we should focus on in the next set of reforms. >> great. ida, it's great to be here. terrific conference. very fitting for aspen to convene this group of experts to take stock of our situation on the tenth anniversary of the pension protection act. although, to be provocative, not because the ppa was the main driver of the automatic 401(k) revolution in planned design. it was a meaningful factor, as we all know, but probably not the main driver. in the case of auto-enrollment, auto escalation, asset-allocated default investments, this isn't the tenth anniversary. it's the 18th anniversary. treasury and irs bank this month

18 years ago issued guidance that first defined auto enrollment and approved it for 401(k) plans, and we included in that a 401(k) example with a 3% default contribution, an employer match, no employer stock and a default investment that was a balanced, diversified, balanced fund. we had the advantage of having a master promoter to showcase this ruling in a speech that month, president bill clinton, at the saver summit in june 1998, highlighted this guidance. and, by the way, ida, it's hard for me to forget that classic clinton administration timing, the four a.m. call with his

speech writers trying to explain what automatic enrollment was and how to the describe it. of course, as always, the speech turned out really well, and he was great. but i barely got there on time. >> [inaudible] >> yeah. the new, you know, the new policy of auto enrollment was slow to catch on. it was pretty lonely if you were promoting it the first couple of years. we went to the thrift savings plan, tried to persuade them as the largest 401(k) type plan in the world to use it. no dice. not interested. at that time. investment firms, a few of them were interested in principle, but at this point, 1998, '99, had question, you know, what's in it for us? employer groups, likewise.

kind of nice idea, but we don't want to be the first or second or third to try it. after a while, we continued to issue rulings indicating that it was okay to not just limit yourself to 3%, 403bs could do this, 457s could do this, state and local sector, etc. and eventually, as we know, we started to get a little more uptick, a little more take-up among employers. and, eventually, the organizations who are now great champions of automatic enrollment, automatic escalation, etc., began -- around 2000, 2001 -- to the take an interest. what also happened was a few phone calls from the hill, congressional staff. i remember calling up in 1999 a

year after we'd put this out saying, you know, there's this thing called automatic enrollment. have you heard of it? said, yeah, you know, we developed this ruling, we issued it, we're trying to get people to do it without too much success. and they said, you know, actually to be very candid, my boss thinks it's a great idea and wants to get some credit for it. so how do we get in on this? that was the genesis of the ppa. 401(k) provision ares, obviously -- provisions, obviously, not the defined benefit funding provisions. i said my first concern was that congress not do anything to inadvertently kill the golden goose here but would keep an eye out for any useful legislative steps that might help promote auto enrollment. and, of course, eventually the preemption of state lawses by erisa that might otherwise constrain auto enrollment, the

provision that allows people to retroactively unwind, get out of auto enrollment if they didn't realize that's what was happening to them and the other ppa provisions resulted. we ultimately saw about a third of large 401(k)s taking up auto enrollment with a rapid, increased rate of increase just before ppa. once ppa was enacted, of course, it augmented in an important way that spread of auto enrollment and got us up to manager like one-half -- something like one-half of the larger 401(k) plans. now, you've been talking about the unfinished business. in the case of ppa, we were focused on one of our two main

agendas; that is, participation. people who are eligible for an employer plan or employers that are willing to sponsor a plan, that do sponsor one, how to fill that out, make the plan stronger, add -- increase the participation rate, add diversified investments as a default, etc. the other agenda was not a ppa issue by and large, it was the main unfinished business still left over from erisa. coverage. how to get the one-third or so of american working families into the system when they didn't have access to a plan, they didn't have an employer who was willing to sponsor a 401(k) or a pension or anything else. and that is, of course, still unfinished business for all of us.

the administration has its broad coverage proposal that the president has put in each of his budgets, the automatic enrollment in iras and the states have now started to take that proposal and enact it at the state level. oregon, connecticut, maryland, illinois and, this summer potentially, california. others potentially next year. david john at heritage and i, then at brookings, had developed this automatic ira with the thought that we could get bipartisan and cross-ideological support and, indeed, we did, including notable republicans and democrats in the senate and in the house co-sponsoring the legislation. but when obamacare took place and the relations across the aisle became a little more

fractious and difficult, this was a bit of a casualty that became increasingly difficult to maintain that bipartisan co-sponsorship. and the states are now moving forward as the president indicated as long as congress isn't acting on automatic iras, he's expressed support for the states going ahead and doing it. we've been supportive of expanding coverage in a dramatic way one way or another, though i think i and others share the concern that we not end up with a vast, conflicting welter of requirements in different states that don't go together or that apply to interstate employers which was never original idea, since those are the ones that typically have a plan and would

not be affected by the auto ira proposal. i would love to talk about and am passionate about the topics that my colleagues on the panel are going to discuss, the lifetime income, importance of that, the open meps, desirability of, excuse me, of making the system more effective for minorities and people who are traditionally left out and other ways to make the existing system work better. but i would like to remind us all and make sure that we don't lose sight of the fact that the existing system also needs to be expanded to cover people who have been left out of it. and that that agenda still needs to be addressed. as a footnote, treasury has gone

ahead in the meanwhile at an administrative level with a much more limited initiative, myra, that, ida, you mentioned. and this is not intended to be the solution to the coverage problem, but just to be another step, another measure to chip away at the problem of tens of millions of our fellow citizens not saving at all. the idea is to have a roth ira with a single investment. very simple, no choices of investment to make, no fees for the individual or the employer if the employer uses payroll deduction for this, voluntary at the employer and individual level and a very basic way to get folks who might be risk-averse, market risk-averse to dip their toe in the water and start in the starter account or incubator account, start to save for the first time.

hopefully, then develop a lifetime habit of saving and exit from this once they reach $15,000 balance into the private sector savings environment that most of the rest of us are in. so, ida, i'll stop there. >> thank you. and, you know, one of the ways that i'm going to make my job easier and let you get your wish i'm actually going to let panelists ask each other questions at the end of this, and i think that's going to generate some really interesting conversation. >> great. >> one i have for you and then we'll go to anne is you've talked about creating the myra, and you've talked about coverage being that piece that really is the standing out as the mission that we have to address. your initial concept with david john back in the day was really a three-part series many some ways. there was myra was a piece of a package that would both expand

coverage and adequacy in some ways for small dollar savers. so can you paint out the picture of kind of what that, what that looked like? it was -- and you've done a lot toward direct depositing, right? a kind of refund into an account as well. so i just wonder if you might paint that full picture for us briefly. >> yeah. i think david and i were trying to, excuse me, to build success on failure. we took a bunch of failures and put them together. first, auto enrollment which, of course, is now a success. but as i was saying, for the first several years it was an awfully slow grower. we took payroll deduction iras, and this is the most apt point relative to failures. so this was 1999 or so. treasury, and we got labor to join us, put guidance out saying, you know, employers, if you're not ready to sponsor a 401(k) plan -- which we continue

to wish you would do and encourage you to do or a pension plan -- at least let your employees save through your payroll system by letting them use the payroll deduction that we all use for our 401(k)s or 403bs and save in a tax-favored account which you, employer, don't have to create or oversee investment of or have a trust for. just make it an ira. employee owns the ira, it's his or her money, they can take it, the government can't take it away from them, and the employer doesn't have to contribute. you know, we'd love for you to adopt an erisa plan, a full-blown plan, but if you're not going to do that, you're a small employer not ready, at least payroll deduction iras sound like a really easy, no-erisa, no-tax qualification rule, minimal compliance solution. we put it out there, and it was

like a tree falling in the forest with no one there. i don't think there were a hundred of those in the entire country. maybe now there's a few hundred. maybe there's a few thousand. but it's de minimis. it was a complete flop as an idea. we did discuss the question, should it be required of employers that don't sponsor a plan. and i was the first one to say, no way. let's, like everything, try it out on a voluntary basis and see if it works, you know? requiring things should be an absolute last resort. well, we tried it, as david john and i discussed when we were working up our proposal. we tried it for a good eight years, and we might have gotten, like, one or two a year of these things. so we then decided, okay, let's require payroll deduction iras only if employers that don't have a plan. you have a plan for anybody in your work force, go in peace.

but if you don't have a plan, let's at least ask you to let employees use your payroll system to save. and that's where that came from. we required it of employers above a certain size, ten employees, been in business for more than a couple of years because it hadn't worked as a purely voluntary option. and the employer doesn't have to contribute, doesn't, even can't contribute. because if they're willing to make a matching contribution, sell 'em a 401(k) which is what we really want. this is just a fallback, the payroll deduction ira. so we took those elements, combined them, and our thought was diversified investments would be the default, you know? the target date fund kind of approach. if need be, if an employer or small business doesn't want to

choose a private sector investment partner to do this since we wanted the investments to be private sector investments, private sector iras, then we wanted a fallback. and so we thought that a u.s. savings bond, a retirement bond could be something that an employer who wants nothing to do with this could just send the money to. but then with the idea that it would be moved into the private sector relatively quickly so that the money would end up in the private sector, and we would not be building a government program except as a transitional incubator for the accounts that are so small that the private sector does not want them and cannot break even on them. so, ida, that's the basic answer. >> thanks for the background. and i want to use that as a transition to anne who i want to thank for being here. anne lester, who i've had the privilege of getting to know this year, is head of retirement

solutions, as i mentioned, for global investment management solutions at jpmorgan asset management. i'm going to go way back for you a little bit and say after your tour of japan as a fulbright scholar, you ended up here in d.c. for several years staffing the senate government affairs committee. and only then did you move toward jpmorgan asset management where you've been for almost two decades, really working at the forefront of some of their innovations like the smart retirement strategy that give -- looking for ways to give workers who participate in private retirement savings system the tools to save adequately and sustainably. and that's the charge to you with. we heard something of what mark said, the thing that the pension protection act did focus on was participation and plans and getting that up. but you've got a lot of ideas about the adequacy within those plans, and so i actually wonder if we might ask you to flush out that part of this solution framework for us. >> absolutely. and i just want to say thank you so much for having this event,

hosting it and making sure that, you know, i like to think about the parts of the ecosystem that need to be involved in a conversation, and we need providers, we need government officials, we need folks representing the individuals to come together and figure out how to make this better. the other thing i would say, and this is something that we have been spending some time on with our team, is thinking about the things that are nger term in nature which i think a lot of these conversations have focused on, you know, changes to policy, changes to regulations, changes to law that we could all work towards. but also within the scope of what has already been done, there is enormous room to have some relatively low happening fruit that we can -- low hanging fruit that we can really move needles on. so i'm going to spend a little bit of time talking about that today, and that is in no way meant to detract from any of these broader discussions whether it's access and ways to get employers who currently feel it is beyond their time, talent or interest to get those plans

offered in the workplace or other, other proposals. so if we just quickly -- and i know we've all sort of reiterated versions of the same story, the problems that we face, right? low savings rate, broadly speaking for many parts of working population, inadequate savings although we would echo what our keynote speaker referenced as many people have, in fact, accumulated adequate balances when they've had access to those plans. but by no means, not everyone. this is really important. we've been surveying individual participants, and only 38% of them feel like they're adequately prepared for retirement. and it's not necessarily just about the money. they don't know what to do or how to do it. so this is something i think we can help with. and then finally, again, as part of that 60% of americans have not sat down and figured out what their number is. they don't know what the shape of the problem is going to be

more -- for them. so when we look at what we can do immediately, today -- and there's already been extensive discussion around the savings rate, right? -- we have the tools, the ability at our disposal to encourage employers who already offer plans to think about increasing their auto-escalation rates. there was a question, i think earlier to you, jack, about plans that have various caps and floors. as we talk to plan sponsors, very, very few plan sponsors even take auto escalation above a 3 or 6%. so it's a relatively small handful that actually go up to 10%. that is something they could all do today. and secondly, think about how the money is invested. again, i think we saw some statistics earlier saying how much better things are for participants who have defaults, if they're very young workers getting out of 100% cash, if they're older workers maybe

getting out of 100% equity. and for those participants who have been defaulted or chosen, a qualified default investment alternative, a target date fund, a balanced account, a managed account, we see enormous progress. but that is a relatively small number of individuals even today. and so what i want to do is draw people's attention to some statistics that we can share with you. again, based on a survey that we recently did of plan sponsors. so how many plan sponsors, and this is across all sizes, have adopted automatic enrollment? 45%. skews very differently in the large plan market where it's more like 80%. but in the smaller plan market, still a lot of work to do there. automatic escalation, only 31 percent. so that's even harder. and then finally, when we look at being allocated appropriately, half of those who have automatic enrollment do

have a target date fund. however, only 7% have gone back and said for those employees who started before we started automatically enrolling people, you know, what do your investments look like? and are you adequately invested for the goal you're trying to achieve? and the answer, again, is very, very few plan sponsors are done that. -- have done that. and we think that's the easiest thing to happen today that is most likely to be met with a positive employee reaction out of all the things we're talking about. that is something that every plan sponsor who decided to could get done in the next 12-18 months, although their recordkeepers may have a line of people at their doors. but it is definitely something that is within their power to do immediately. so when we think about why people aren't doing this, right? half of plan sponsors feel confident that their employees have an appropriate asset allocation. half. only a third of their employees

feel like they're appropriately invested or know how to adjust that in time. so there's a gap there already. and then when we look at that fraction of participants who have chosen to manage their own asset allocation, right? who are picking their own investments off the menu and, again, in many plans this is the bulk of participants, as many as 70 or 80% of a population, most of them, 80% of them, in fact, are outside of the stock/bond ranges that many target date providers would indicate. this happens to be plus or minus 10% over ours. most people follow a similar path. so you could quibble about 10 or 15% here or there, but you can see this looks like a shotgun of allocations. and, in fact, there's a distressingly solid line at the top and bottom of this graph, if you can see it. and it's in our paper which we have outside. a lot of people have 100% stock or 100% in cash regardless of their ages, and we would argue that's a really bad idea.

so what can be done, in fact? why haven't plan sponsors taken the next step and done something about it? well, 14% of plan sponsors thought they would do it, talked about it but decided not to because they thought they would get too much pushback from their employees. on the other hand, 83% of employees say they think it's either neutral or a good idea. and, in fact, of the 16% of our respondents when we did the survey who have been through a re-enrollment, 73% of them ended up in a qdia or target date fund. so either because they weren't paying attention and it happened to them and then they went, well, i guess that's okay, or they actually chose it themselves. so, again, there's a really big disconnect i think between what employers are worried about possibly because the people they tend to hear from are a very vocal minority of individuals, and the reality of what happens.

just a quick story before i wrap up. we work for a very large plan sponsor in our target date funds to who put in target date funds and re-enrolled employees in october of 2008. and you may recall that was a rather momentous time in the markets. we went to visit them in january, so we were still sort of in the middle of the financial crisis and the ec equity markets falling, and i said, so, how does it feel? you took all of your employees, this is maybe 50, 60,000 people, and put them in target date funds, and look what happened. and they said, well, it's interesting, we haven't gotten a single phone call. and then the plan's sponsor said, you know, i do feel terrible about those older workers, i lose sleep over it. i said, believe me, i lose sleep over that too. and as we were walking out, his junior staff person pulled me aside and said, you know, for every person that you took out

of 100% cash, we took five times that number out of 100% equity. i wouldn't lose any sleep over that. so it's an interesting thing to look at, right? when you try to do these solutions, it's not going to always be the best thing for every single person, but we do think you have to look at on balance how does this play out. and it's a difficult thing to look at but an important one. 28% of plan sponsors have not thought about a re-enrollment because they thought their overall asset allocation was appropriate. 80 percent of participants are misallocated. the average participant only holds three funds out of a menu that may have as many as 10, 15 or 20 selections. there's no way those people can possibly be appropriately allocated. so, again, there's a big disconnect in the data, and many plan sponsors look at a pie chart showing their overall asset allocation. maybe they look exactly like a balance fund. but any individual participant looks nothing like that. so, again, we need to do a

better job as an industry of presenting the data that looks at it from the point of view of the individual participant, not the plan or plan sponsor, because those lenses are very, very different. so just to close up, and i'd like to sort of end this where i started, to say i think we collectively bear a huge honor and a responsibility to try to make this better, and i think it's just so encouraging to be part of this conversation with, i think, the people that need to be helping to create better solutions whether it's within the framework of the existing, you know, rules, regulations and practices that exist today, and i think there are a number of very specific things can be done or on a longer-term strategy to come up with policies that will really help give more access. and, again, i think that is probably a theme i would echo. the biggest problem. but certainly, within those who already have access make it better. so thank you. >> thanks. thanks, anne. i mean, it strikes me there's

two, two aha moments i'm having listening to you. one is when i think about what's happening in the states and any place really, when the effort and focus of so many is on getting legislation passed or getting a new plan in place, the main thing is getting over that hurdle and having it. but then there's this assumption -- and i think we have the same thing. i come from more of the assets field broadly, how do you help more low income households build wealth. we think about savings. oh, we just need more people to save. so a lot of the coverage focus ends with we just need people in these plans. and i think what you're done here is digging into the level of that is the tip of the iceberg. it's a huge tip, and it needs to be addressed. but as you think about solving the coverage plan as ore others -- what do you think the next step people should be thinking about in terms of the context -- [inaudible] you're bringing in more and more people who do not have an investment mindset into

retirement savings plan coverage, what would be your next step thoughts about how do we have to begin engaging a wider set of people to understand the investment decisions? >> so i think it's interesting. again, during our keynote we heard that because people feel like there are professionals be they're in a qdia managing their assets, they're less likely to react emotionally when there are headlines like the sterling falls. i was up extremely early watching the markets this morning. so that's part of it, making sure people feel safe. and it's all about reorienting the definition of success and the definition of risk. so i think we tend to define risk in very convention alwayses, and we translate it in -- conventional ways, and we translate it, well, it's this up and down thing that's driven by this constant information field, but we never put it in the context of the goal that you have. if your goal is a 45-year goal or a 90-year goal or an 80-year

goal depending on how life expectancy goes which is a little disconcerting, if your goal is that far away, we shouldn't be defining it in terms of the market did x or y today. we should be defining it as are you saving enough, are you staying invested, are your asset returns outpacing inflation, right? what can you control, what can't you control? you can control how much you're saving. many people, not everybody. back to your comment about different income levels. i think there's a whole other conversation about income adequacy and how you help people carve out what already doesn't feel like enough to save for this other important goal. but put that in the context of other kinds of risks. and i think we in the financial services industry and in the way we've all been trained to think about the problem, the way our reports report -- again, i would look at the reporting that we provide as a key source of you sort of ask the wrong question and you get the wrong answer and

you frame it the wrong way, and suddenly you have a conversation that's unlinked to the real fundamental issues. so that's a big one. but i think it's also stepping backing from -- and i think the industry and the pension protection act was a huge help here -- has significantly moved away from trying to get people to feel empowered as their own investment adviser. and that that was a huge step. but, you know, it's complicated. you know, i would just say savings is more important than anything else. if people don't save enough, nothing, no investment strategy will work. so that is absolutely the most important step. >> good bottom line. thanks. so now we're going to turn to jamie who, as i mentioned, is the head of institutional investment solutions and the ceo of prudential bank and trust with prudential insurance company. jamie is not only known for the level of expertise in his writing and the issues he talks about with coverage and adequacy and guaranteed income and pensions, but for me, jamie

stands out for his passion and for the generous way he shares his knowledge and time with the wide range of stakeholders that anne was just talking about to help all of us get on the same page if we don't take up the unfinished charge. so, jamie, i'd love to invite you to talk with your data on some of these coverage issues and some of the solutions going forward. >> thanks, ida. >> thanks. >> on the tenth anniversary of the pension protection act, we can celebrate all the work that mark and others have done on automating savings at the workplace. today, the vast majority of workers at medium and large institutions are automatically enrolled and savings in default investments and are moving toward a secure retirement. but more can be done. four things in particular. we can expand the level of

automation. as anne mentioned and as our keynote speaker mentioned, we can start the level of savings higher and escalate it higher. we can get more people enrolled in qdias. we can, second, expand the level of incentives for low to moderate income be families in particular. expanding the tax savers credit and making it goes it bl -- deposit bl, directly deposited into retirement accounts a as a match. i want to talk mostly about expanding coverage. and the fourth item that we should touch on, too, is income. and i know derek will be talking about it. i'll touch on it in just a moment. on coverage i want to talk about it in three ways. i want to talk about why expanding coverage is important. i want to delve into a particular option but also give credit to the other options that are along the way. and then i want to give a

forecast for is this something that's possible in the near term. so why is coverage important? because55 million american workers -- because 55 million american workers, half of them don't have access to retirement plans. and so who works at those small businesses? it's those 55 million, 5.6 million workers, 55 million americans, they account for $2 billion in payroll. and they don't have access. 30 million of them are women. and women in particular have distinct needs around financial security. they feel like they are less prepared, according to prudential's research. they don't have the tools, and they depend on the workplace for help. there are 22 million people of color at at the small businesses that need financial security for all the reasons that were talked about earlier.

so a solution -- and i want to, before i talk about multiple employer plans, also want to give credit to and acknowledge the importance of the auto iras and the myra solution as well. mark and david have done just tremendous work on a bipartisan basis to think about solutions that make a difference and that are now being imitated by the states because we have not made progress at the federal level. but there is another option that we're getting greater bipartisan support on as well. and let's figure out how do we deploy all of these solutions and see which one the marketplace accepts and responds to tackle such an important public policy issue. and that concept is a multiple employer plan. so why don't small businesses offer retirement plans? primarily because of cost; that is, they can't cover the fixed cost of setting up a plan across so few participants, across so

few workers. and the cost is comparable to a retail account. the other challenge is fiduciary responsibility. small business owners are personally liable according to the prudent man standard underneath erisa. this is an important safeguard that makes a lot of sense. but it scares away small business owners. and then the administrative hassle. so what do we do about this? we can put in place something like the auto-ira which is outside of erisa, has lower savings limits but is very easy to administer and has a lot of appeal because of that easy administration. a complementary solution is the multiple employer plan, one that allows small businesses to pool their purchasing power and act like a medium or large institution. the proposals that are underway in congress by senator hatch in partnership with senator wyden,

in the house by many members as well, allows small businesses to overcome the commonality of interest requirement that is right now unaffiliated businesses cannot pool their purchasing power. the proposed bills would allow them to do that. the proposed bills would also transfer fiduciary respondent from the individual to a -- responsibility from a the individual to a professional to allow the trust to make decisions around investment lineups in process, and the small business owner would be responsible for just remitting deposits on a regular basis. it also would make the maul business -- the small business owners instead of joint and severablelyline liable, just lev rabblely liable. severablely liable. the opportunity set for doing this is tremendous. when small businesses hear about the potential for this, those that don't offer it, 68% are now interested in offering these

sorts of solutions. we see the opportunity for take-up to be great. and, in fact, there are substantial benefits to multiple employer plans. it covers within erisa not losing fiduciary responsibility having been done by a professional, reducing the administrative hassle. a useful alternative and complement to an ira approach. and so we see -- although they're not aware of it yet because it doesn't really exist, there's an opportunity when they hear about it and that they like the benefits. i'm going to stop by talking about income. it's not enough to the give access to savings at the workplace. the purpose of savings is to generate lifetime income. think about it if you were

planning on retiring on -- next week on july 1st. think about the panic that you'd be having today and last night. should i postpone retirement? prudential's recent survey, we find that 77% of participants crave, crave retirement income solutions. and retirement income solutions can work in conjunction with qdias and target date funds. they can protect against sequence of rush risks -- return risks as you leading up to retirement because they translate the pool of assets into lifetime income that's measurable and predictable and allows people to retire on time. lots more benefits, i'm sure, that derek will be talking about in just a moment. >> thanks, jamie. i was going to ask you -- my question would have been if -- i'm going to use the metaphor if you wave your wand and open up for a possibility now, you know, we've talked so much about auto ira. you're saying 68% of small

employers are really excited about this opportunity. so the question is, do you think that the automatic enrollment and the auto ira ideas are complements? do you think they're substitutes? would you say a little bit about that? >> i think that -- well, automatic enrollment, automatic escalation, default investments are, could be part of a model plan design within an open mep environment. an ira is a model plan. every ira has the same set of rules no matter which institution you go to. one concept that we advocate for within this multiple employer plan concept is for the irs to write a model plan design that includes all the best practices around automatic enrollment, automatic escalation, reduced only really hardship loans. and what that would do is that would increase competition just based on price, investment performance and service.

that is, you -- the fiduciary might choose a different set of investments, there might be a different scale, they might choose a different service provider. but like an ira, if you were unsatisfied, you could go to another provider, and the rules don't change along the way. so i think that the ira solution is very administratively easy today. the open mep solution might have better purchasing power over the long run because it's a larger group of people investing. it also could operate underneath the 401(k) deduction rules which would allow greater contributions. iras, group iras are well known and their simplicity and ease of use have a lot of advantages as well. most of the states are going down the ira route not because of the -- not just because of the simplicity and certainly not because of the lower limits, but because they're not -- they don't want to be covered by erisa.

they don't want to be erisa fiduciaries, the states don't. so there's a real challenge and set of trade-offs there. >> i think that's helpful e louisation. and, again, you guys are going to be asking each other questions, so be thinking about -- you know, not too hardball, but the ones that'll help the audience as well. diane oakley is a wonderful -- and aye gotten to know her very well over course of working at aspen over the last year and a half. she's the executive director of the national institute on retirement security. and prior to that, and i think you began that role in 2011, so you've been there a few years now. you served as senior policy adviser or to north dakota congressman earl pomeroy who is himself a real leader in retirement work and also on tax and social security and financial services and work force issues. and then i think really before that you were in the industry yourself and served 28 years with tiaa cress now known as

tiaa and a lot of the work that they've been doing. so a lot of experience. and you've come here with a lot of perspective, but you're doing a lot now to focus not just on coverage, but on adequacy. and in some ways you're combining those things in terms of your focus for low and moderate income savers and the retirement system. so that hopefully sets you up about the presentation you'd like to give today. >> [inaudible] for a member of congress at the time that we passed ppa, but i did have that privilege. i will say that my boss ultimately voted against the bill for different reasons that weren't being discussed today. but in terms of what we did with the pension protection act when it came to incentives, the tax incentives because mr. pomeroy was on the ways and means

committee, we looked at two things. one, basically, going back to tax changes that were enacted from a bipartisan discussion that became part of ectra. they were created in 2001. they increased the contribution limits, created the catch-up elections for individuals over age 50, and for the first time -- this was momentous. it was 2001 was the first time that congress actually enacted a tax provision specifically targeted at increasing the savings for low and middle income individuals. and that has become known as the savers credit. those two things were enacted in 2001. the savers credit was given a six-year or five-year trial period, so to speak. it was going to expire at the end of 2006. the extension of the income, of

the increases in contribution limits and the other changes that were in there to increase retirement savings expired at the end of 2010. and so one of the things that was done and, actually, was the bulk of the revenue -- again, when you're in the tax committees, you look at where is the revenue going. but the bulk of the revenue that was expended in the pension protection act ended up for retirement savings. and a as you look here, i went through the budget score for the pension protection act, and about $36 billion went to raising the contribution limits. now, roughly in 2006 about 5% of the taxpayers who were contributing to plans were limited by those limits. on the bottom side of the scale, when you look at individuals who were eligible by income for the saver's credit at that time,

2006, there was about 25% of individuals eligible for the saver's credit as a non-refundable credit. if the credit had been refundable, the group would have been larger. it would have been about 43%. so 43% of the taxpayers at that time could have been eligible for the saver's credit by income. and that ended up with about a $10 billion cost, roughly about a billion dollars a year. but when you look at the total distribution of the tax incentives that we have in the tax code to encourage people to save for retirement, one of the things we know because our tax code has higher tax rates as your income goes up, the bulk of the tax incentives go to the top quintile of income. and, in fact, only 2% of the tax incentives go -- the overall tax incentives go to the lowest

income quartile, another five go to the second income quartile and another 9% of those tax credits, which are roughly a little -- in the most year it was about $150 billion for 2015. the saver's credit has been pretty consistent at about aing billion dollars a year in terms of tax revenue going to support retirement savings. and i think lolo actually did a fabulous job outlining why it's important. our own data at nirs, we know only one in five households in the lowest income quartile has any type of retirement savings available to them. when we look at retirement accounts' access, only one and two in the second quartile. you really don't see income quartiles with more than that until you get to the top two.

when we look at pre-retirement households, these are people between 55 and 64, when we look at their median savings for all households, not just those households that have accounts, this is a shocking number. most people said that can't be true, but it is. it's $14,500 when you use the data that is available through the federal reserve survey of consumer finances. that, in essence, is about the average benefit for one year that someone will get from social security. when we look at households of color, the median savings for households of color is zero. so that means the household at the 50 income quintile has nothing saved. if you look at households who saved at least $10,000, you'd end up with roughly one out of

every four households that are black, one out of five for latinos having at least $10,000 saved. and we also know when we compare the level of savings even among those who have accounts that households of color have account values that are one-fifth of the value of accounts held by the white population. so, clearly, we have key populations. this is just looking at those categories. we recently broke it down by women. women is another important category. so we have the saver's credit. congress extended it in 2006. they also did two other changes. they indexed the income limits. when the saver's credit was created, it was limited to households that were earning -- if they were a joint filer, it was $50,000. if you were single, it was 25.

that got expanded and indexed through ppa, and to that today -- and so that today if you have a married household income level of $61,500, individuals can use the saver's credit. if you're single, it's half of that, it's 31 or something, 750 or something, i think, is about what it is. so if you look at those two things, those are where the saver's credit limits are. when you look at the group using the save's credit -- so we've indexed those limits, and that's positive. the other interesting thing is we have finally started to see an increase in the number of households or taxpayers using the saver's credit. since 2006 the data we looked at from the irs tells us that an additional 2.2 million families -- so we currently have about 7.4 million families, taxpayers who use the credit. they've used the credit. the median -- the average credit

is -- [inaudible] and that's $5 more than it was in 2006. part of this is limited, people that don't have the resources to save that much, but they are willing to say it. the one other data point that really concerns us, and this gets to the structure of the credit, is the credit is structured as something you have to file a tax form to get, you have to actually file a long tax form, so you can't file a 1040-ez tax form. individuals who take the earned income tax credit, another tax credit geared towards the same income population, that credit can be filed on a 1040-ez, making it much, much easier to get. and then there's also another form, i are, s -- irs form that you have to fill out that's sort of to make sure you haven't taken money out of your account over last two years, because

that will disqualify you from getting the match. now, the interesting thing is for many of these individuals because they are close to having almost no tax liability, they really have no other benefit in the tax code. this is the only benefit. so the corporate executives who choose to put, you know, 16 or $24,000 into their 401(k) plan, they get their full tack benefit right -- tax benefit right up front in terms of what is provided for hem in the tax code. we make these vims file -- individuals file a tax form, and we lose 35 percent in 2006, the most recent year that we could find data for that. so 35% of people in those income levels who have actually saved don't file for the credit. and don't get the credit. and so some of -- [inaudible] what can we do to make that more fair?

obviously, finding a way to change that, make it their -- jamie and i agree entirely, putting it into the individuals' accounts would make a big, big difference. and, in fact, there was a report a few years ago from the government accountability office that looked into how could you work to build low earning households better retirement savings? and they specifically looked at if you had auto enrollment and you had saver's credit going into individuals' accounts, what would that mean? and the numbers here are annual, they may not sound a lot to some individuals, but it's $479 per household in the lowest income quartile, households under $35,000. the next bracket is households under, between there and 50, they would get about another $1,043, and the benefit is more as you go up, because they're

putting more money in. but the importance here is that this is real income to these individuals. because individuals in those two bottom categories when you look at them, when they term to be in retirement, these are the individuals who have nothing but social security for 90% of their income. >> what we are done is we are made it difficult. we are taken all of these wonderful things in pta and made

automatic but they are not automatic for the people that need automatic stuff the most. we haven't made the tax incentives that are there available to individuals. so one of the things we think we need to do is we have to find a way to make the text simpler to get, make sure it goes directly into accounts, and if we can combine that with the automatic ira so we developed recently a short flier we can share with state legislatures who are thinking about can they do because they are hearing from their constituents about the importance of retirement savings. this sums it up. we need to educate lower in come people. when you think about jack's data on the increase vanguard reported in households under

30,000 because of automatic enrollment think of how many of those individuals don't know the savers credit exists. how do we get them to understand that and that it can go into their accounts. that was the other thing pta did. it made it clear and told the irs you need to be able to deposit these into accounts. refundability was recently one of the recommendations from a bipartisan policy center study on requirement security and making the savers credit a refundable credit has been garning bipartisan support and that is a significant positive development moving in the right direction. we can come together and come to agreements on these issues. >> thanks, diane. >> you are welcome.

>> i will hold my questions and get to derrick and come back around. we had an overview from mark and a history and debate automatic enrollment constitution that is part of unfinished businesses. we had two takes at adequecy. we have had this by having higher krdt credit or uptake o saver credit. and jaime alluded to, and we heard a few times as well, that this other piece ilifetime in come which often gets punted because it is down the road. we know with any big issue if you could put off the conversation you tend to. we also know people like lump sums.

but especially now with 10,000 baby boomers retiring a day these questions are coming to the forefront of how much does what looks like a large sum actually take you into the future. i think any of the speakers on this panel and other panels will talk to any of these issues and would love to do so but we put them into specific requests they talk about one specific part of the solution set going forward. i am going to introduce derrick lori andrews a regulatory engagement in policy at tiaa and we asked him to come talk to this issue in the broader conte context. just a little background about derrick besides him being one of my favorite people to go to learn about the in and out of the details and part of that is because of his long stent on the hill being the staff director at the senate finance subcommittee

and being senate finance counselor to senator jeff binging ham. we hawse at davidson harmon a number of years and at tiaa a couple years now leading the crafting and implementation of the new engagement strategy at the global, federal and state level and there are policies you are developing at this point. thank you for all you will share. >> thank you, ida, for the introduction. it is a great pleasure to be on the panel and to be back at aspen with long-time colleagues and friends. it is a great honor to be part of this conversation. i think tiaa is about to celebrate it's hundredth anniversary and the mission is also about securing retirement security for those we serve and those when we serve serve others. i wanted to start by framing

this conversation with a question. that is among tia's married par advertise pants who are now age 65 what are the odds that at least one spouse will reach the age of 90? so you can answer this in your head. and the answer is 45%. nearly half of our married participants either they or their spouse will live until age 90. you will see on the right we asked this question recently of a conference we hosted for senior university executives. so if you didn't realize that the number is 45% you are not alone. many senior executives thought the percentage reaching age 90 is quite a bit lower.

so what actually are the probabilities? even those who don't live until age 95 among our participants have quite a life long expectancy. here is the great majority of our five million participants. for our single inewties 75 paying out at 82 and 25% at age 95. and of course, for joint annuity the numbers were higher. 94% of our joint annuity is paying out at 82, 44% at age 95. i think there is always a bit of hand waving when talking about tiaa participants. they tend to live longer than average because they white col

ler and higher educated. we are dealing with a fairly set of equal individuals. even if we are not focused on the data we have, like expectancy is increasing dramatically and people are often quite unaware of the extent to which life expectancy is increasing. what do these longer lifespans mean? here is a chart from the stanford tr on longevity. it means longer retirement. this chart shows retirement age, the red bar, and life expectancy the blue bar, have been widening in gap. and in fact over the count of the century, 2015, the rate of the retirement will have tripled

from eight years to a little over 22 years. what does that mean for participants? the good news is for them is over two thirds of our participants have some form of primary assets devoted to our traditional product which is fixed annuity. and they chose a rate that is high relative to the general population. we think there are a few reasons for that. read among them, our participants have access to annuity as saving vehicles throughout their working years. they have it as a pay out option as well. we offer a guaranteed fixed annuity and these are things people are thinking about and getting guidance during their working lives. you will see among our

participants, among the 70% that chose annuity, 92% were satisfied with that choice. what i think is more striking is at the bottom of the screen which is if you take our average participant they are replacing 90% of their income in retirement. that is a combination of saving, annuity payments and social security. that, we think, is you know, case in point perhaps for the importance of having lifetime income. participants seem to recognize that replacing employment is a goal. there is not something pecular about the participants. 48% of americans say having guaranteed income to cover their

living costs is the primary goal of retirement. if the guaranteed income yields dramatic success that begs the question which is my next question for you which is what share of all defined contributions have access to an in plan lifetime income solution and the answer is a mere 13%. actually, the numbers are a bit disputed and i don't know if jack is around but he might have a lower number. 13% is the highest number we have seen in terms of estimates. there are some that say as few as 6% have access to in-plan annuity option. so if we were to remove the 40 3 b universe we know the number would be lower. for many americans, that leaves a lot of guess work in planning for retirement. they are looking through the

proverbial crystal ball. remember the uncertainty that people guess their life expectancy. two and three pre-retirees under estimate the life expectancy of the average 65 year old and nearly half of them do by five years or more. as a matter of prudence, i think this is a question we want to be focusing on which is how do we help individuals prepare for not only a secure retirement, but a secure retirement where income is part of the solution? we know that very few american participants are thinking about their plan balances in terms of lifetime income. here is another question from all planned participants, not only our own, and asked have you done an analysis of how your savings will translate into monthly income in retirement and you can see the overwhelming

majori majority, 62%, haven't thought or done an analysis of how savings will translate into monthly income in retirement. all of this brings us to the ultimate question ida asked me to discuss which is if we are moving forward with a policy agenda what role is there to promote lifetime income. we would say there are three policy blocks we encourage policy makers to considered. the first is to enhance the understanding of lifetime options. for 50 years, tiaa has been offering lifetime income illustrations to investors they have a projection on their statement that helps them understand what their plan balance would be in terms of life income. we are pleased the labor put out a notice of proposed rulemaking

to look at getting this illustration on all partticipants benefit's statements. we hope this becomes a reality. we think that whether individuals decide an annuity option is right for them or not all would be well served by understanding how their balance translates into lifetime income. the second is we hope the labor department could talk a like at the fiduciary concerns that child many employers from aufshiaufs offering annuity. the government prompted clarification of fiduciary but the rule didn't thread that proverbial needle and we would like to consider whether further reforms are appropriate. in particularly, we would suggest that dol come up with specific measurable guidance for evaluating insurance company's financial strength.

and finally as the role of depalt and in particular diane had compelling evidence over the importance of automatic solutions. not required by congress, dol did structure the qdia roles to require liquidity of the investments. we think that ought to be reconsidered. we have developed the target date funds and think those are important products but we need to keep in mind they cannot offer a guarantee even though many participants think a target gate fund does include one. we are encouraging policymakers to think about making another look at that regulation.

in particular we think the time is right to consider whether an annuity sleeve can form part of a target fund to give that individual that certainty. >> thank you, derek. >> i think we are presseded against time and thank you for the opportunity to add the lifetime income spin to this conversation and really again thank you, ida, for convening this important gathering. >> i know it is 1:30. i encourage us to have conversations. we can take them off line. a quick rapid fire down the load because i said there were three parts. we will talk about assessing what happened, what is left, and what the solutions are and this third question is what is it going to take. what is it going it take in terms of political will, collaboration, in terms of different changes to make some of these solutions a reality. if you all would take a few

sentences to offer your own insight into what it is going to take to get us to take the next steps forward. anybody can start. >> taking advantage of what is already in front of us. there is a ton we know we can do. but i think we have to help plan sponsors in particular with what is exist and get comfortable they will not have a revolt from their employees or a potential legal issue they may in reality not face but are certainly worried about. i think that has to be part of it. i think from a legislative perspective, i am encouraged at these conversations which seem too me this year to be more concrete and tangible than prior years. i think we are moving in the right direction. >> i think on covered solutions i am highly encouraged by the bipartisan nature and the endorsement of these sort of issues for everyone from chairman hatch to the president

to the speaker to there was a roundtable hosted by senator in and warren to the bipartisan center. there is agreement. we just need to get through the workings of congress in this sort of environment. >> the other thing i would say is this is something in our cereva data the american people are crying out for -- survey. they want help. 80% of those would like to see washington pay more attention to retirement security because they have a feeling they don't understand how hard it is to save for retirement. >> i would add not to plug the aspen instustute, although i enjoy doing this. i think more conversations like this are important. given the challenges we are facing it is easy to lose sight of areas like this one i i think there are many commonsense

solutions that industry and advocates and legislatures and regulators kind of talk and reach points of agreement. i think the more we are able to bring these issues forward and illustrate as we think about the challenges facing middle class americans and working class americans that this is an area we have solutions ready and i think we would be able to advance the ball better. >> thank you, all. i started by saying the take away i hoped from a was one of optimism and that really we had the evidence at this point and the ideas and the technology and leadership that it is going to take. i think that is true. i am staying on the charge of conveneing dialogue and working with those in the room including those who stood with us during the discussion. thank you so much and thank you to the panelist and we are

adjourned. [applause] [inaudible conversation]

[inaudible conversation] [inaudible conversation] [inaudible conversation] [inaudible conversation]

>> c-span's washington journal live every day with policy issues that impact you. saturday morning, european union ambassador to the u.s. will discuss what britain's point to leave there european union means from a diplomatic status. and a former director of screening the terror watch list and why he thinks it is necessary. and we will lookt at eu's referendum vote and what it means for the united states. join the discussion live saturday morning at 7 a.m. eastern. on american history tv on c-span3, this saturday on lecture and history: >> by the end of the 1880s you have a dramatic upsurge, a

tremendous surge, in veteran's organizations, membership in these organizations, and in the statutes they create. >> a discussion over the ongoing debate over confederate war m memorials. >> back in '76, mr. carter said trust me and many people did. now they are out of work. >> the republican alternative is the biggest tax give away in history. they call it regan law. i call it the free life americans cannot afford.

on july 1st the smithsonian national space and air museum celebrates its 40th anniversary. and on artifacts. >> in '76 we were wrapping up a global age of human exploration with the apollo missions to the moon and launching into the first age of planetary exploration with the mission of the 1970s to mars and the outer planets. we are now in another golden age of planetary exploration particularly on mars. >> we tour the museum with the head of the museum's space history department and learn about the story of human space exploration from the moon to mars. and at 8:00 on the presidency, james rosebush, deputy assistant

to ronald reagan and author of true reagan; what made reagan great and why it matters. >> i came to see, and this relates to president nixon, that a great leader of character is a person who has the ability to discern the future and lead a people to it and through it. >> for the complete american history tv weekend schedule, go to cspan.org. >> now more from the aspen institute financial security program on retirement savings plans. this portion looks at the tenth anniversary of the pension protection act and how it could improved. this is an hour and 40 minutes.

>> good morning, everybody. so we will shift gears now building on the remarks from representative pose and representative crowly. we want to do three things. first we vpt to a conversation about what the pba accomplished and what was left undone. that is the purpose of this conversation. we will get in-depth into it with really great speakers into what happened in the ten years since the tpa was passed, what it means for retirement in america, and what more needs to be done and hopefully that will tee up the next of the day. followed by keynote remarks at 11:30 from edmond murphy, ceo of power retirements.

and then is short break and we will have a second panel all about the path forward and what is the agenda for the next administration. so, what i am going to do, just a note on logistics. the way we would like to do is people make brief remarks and i will follow up with one question per person. woel we will go down the row and have time for dialogue between the panel and questions and answers from the crowd. as you may have noted in your packet we have longer bios so i am not going to go deep into the the bios here. but i will say that to have this conversation we have this incredible depth and seeing the panelist many years of deep expertise. we are excited to bring a number of perspectives to this

important conversation. we will start on my left with lou, who is the president and co of the defined contribution investment association. it is the second time this week i have had to say that and pleased to say i didn't mess it up either time. lou helped found that organization in 2010 and brings many many years of deep expertise in retirement security. so without further ado, luke. >> are we on? great. let me first thank aspen for including me. this is my second opportunity this week to join you all and really appreciate being part of this broader conversation on retirement security. earlier this week in oregon i got to talk a little bit about the coverage gap. i will going to primarily focus

on retirement adequacy which was addressed by ppa but we will talk about coverage as well. probably useful for me to give a brief description of dciia. we will go with the acronym. as mentioned, it is about seven years old and really comes from the aftermath of the tpa. so what i found following on tpa was a real emerging interest from those in the retirement savings world to we are yearning for a place to come together and talk about what we all agree on which is that it is critical that we figure out ways to improve the retirement security of american workers.

really the existence of dciia is a testament to the fact there is a desire out there from the key players in the industry and, union, i think through forums like this week really figure out how to take the next steps forward. let's first take a quick step back. i am going to try to talk through at a very high level where we were ten years ago in the evolution of the retirement savings industry, the primary themes we saw in the tpa on the defined contribution side and how the dialogue has changed post tpa.

>> we've got the right people here, so after some framing remarks, i'm going to quickly get out of the way. so, you know, where were we ten years ago? well, you know, as i said, there was a lot of interest and

passion but maybe a lack of direction around what we could do as an industry to drive better outcomes. and ppa really did a solid job in getting people focused really in two key areas. so, you know, one, ppa did a great job in clearing a path for the use of behavioral techniques primarily around automation and driving better outcomes. and then really also set a path for how we can get participants in the system's to advice -- access to advice on a mass commoditized basis and also on an individual basis. and then finally, as most of you know, importantly, solve the looming concern about extra-permanence.

but i'm going to focus on the first two and where we are now post-ppa. so really there are some key themes to driving retirement security that we've learned now. one, insure that people have is the's to the system -- have access to the system. i'm sure people are going to talk about that as being an important gap left, and i share those thoughts and would be happy to share my potential solutions if we get into it. but that's, clearly, an open issue left. but then once people have access, we need to make sure that they utilize the system. and we've made a lot of steps forward, and i think we have a lot of opportunities to further move forward. then once they're accessing the system, we need to make sure that savings rates are sufficient. and we clearly have tools from ppa in order to do that, and we'll talk a little bit about that.

and then finally, you know, when people are saving at sufficient initial rates, we have to the make sure that they're continually saving appropriate rates as they progress in order to meet their retirement security needs and that those savings are ultimately targeted toward appropriate institutionally-priced investment structures that will get them both to and through retirement. and once we've met all those needs, then we're in pretty good shape. so, you know, where are we today? well, there are definitely a leading group of employers who have instituted best practices and are saving, are defaulting their employees at robust initial rates, auto-escalating up to levels that are designed

to get them to retirement security. some are re-enrolling people annually in default investment structures and then sweeping employees who are not participating on an annual basis -- not just new hires. and or more those employers -- and for those employers, what we've learned is that they're doing an amazing job at getting their workers to a level of retirement security that will get them both to and through retirement. unfortunately, we're not at a point where those practices are universal. so i think a constructive conversation is how do we get to universality or at least close to it with the tools that we have from the ppa and the knowledge that we've developed since? i suspect we can get pretty close. and then once we do, then it's, you know, critical that we start

addressing the coverage gap. and we figure out how to bring that, those solutions to the rest of the population that currently is uncovered. but i, for one, am very optimistic that we have a path forward, that we have the tools we need, and i'm going to defer now to jack who i know has a lot of detail behind that. thank you. >> thank you, lou. -- lew. as you said, there are a lot of tools, but practices aren't universal. so say a little bit more about why you think they're not. what are the primary challenges that plan sponsors are facing that are preventing greater adoption? >> yeah. so, you know, clearly we still have a challenge to get employers comfortable and focused on adoption of plan designs that incorporate the robust implementation of

automation and focus on outcomes. we're definitely seeing significant movements in that direction particularly in the larger employer space. but there are some very critical headwinds. you know, one important one is the fear of litigation. you know, we really have to do something about the, what i view as often frivolous litigation that's out will that causes -- that's out there that causes employers to really resist the, their otherwise natural inclination to innovate and to focus on outcomes. i think there's also, you know, a number of misperceptions or that are common out there about what is allowed or even encouraged in the current law, and there's a lot we can do to educate plan sponsors and those

that advise plan sponsors. and then, finally, there's really a lack of discussion right now about the mutual benefits of retirement security both for the employer and the employee. and a real opportunity to get people to understand that those interests really are well aligned. i know dciia is getting really close to releasing a paper, i'll put a little plug in here. what's in it, it tries to focus the plan sponsor community on the fact that not only is in the right thing to do for your employees, but this is actually the right thing to do for your work force plan and for your company, and that'll be coming out soon. >> great. we look forward to seeing it. jack. so now we're going to hear from jack vanderhei who's the research director for the employee benefit research institute. and as many of you know, he's also the director of the center

for retirement -- excuse me, for research for retirement income. jack has more than 200 publications, if you can imagine that, devoted to employee benefits and insurance with a major focus on the financial aspects of private defined benefit and defined contribution retirement plans. for those of you like many of the people in the audience in the retirement space, jack has been a leading voice for many, many years, and we're delighted to have him here this morning. >> thank you, jeremy. on behalf of myself and the employee benefit research institute, i'd like to extend my appreciation as far as the opportunity to talk about such an important topic. we've been doing research on employee benefits since 1978. we got into the defined contributioning database-building process back in 1996, and i think it's easy to conclude that, certainly, ppa and the aftermath of ppa was one

of the most important developments that we've seep in our -- we've seen in our entire research. what i'd like to do today is just very quickly go over a existing research. we want to set the stage as far as what we've already seen happen with respect to automatic employment in terms of what has happened with respect to the participant behavior. going to look very quickly at participation and contributions as well as asset allocation. but before we get into that in any detail, i really want to have a huge caveat that you really should not look at any of these aspects in isolation. for example, there was a front page story in "the wall street journal" back in 2011 that ended up making the big conclusion that ppa was bad for 401(k) plans, that basically if you look at 401(k) participants, deferral rates had gone down. well, the problem is if you're

not going to look at what's gown on with respect to participation at the same time you look at deferral rates, you're ignoring the fact that a lot of those people in automatic end enrollment plans -- enrollment plans that admittedly have low contribution rates because of the default deferrals of maybe 3% would have had 0% had there not been an automatic enrollment provision for them. so you have to keep that in mind as you look at some of this. what i'm going to try to spend much of my time on is a study that dciia is going to be releasing in a few months that will look at how each of these components that we're going to to be talking about today impact outcomes, retirement outcomes instead of just looking at individual snapshots year by year. and basically, if you want to be able to do something like that, you need a model that's going to be able to look at the behavior of eligible employees under different types of automatic

enrollment plan designs. because, as lew mentioned, there's many different types of designs out there. and if you're wanting to get a comparison to how much of an improvement there has been, you're still going to have to be able to figure out what these people would have done had there not been automatic enrollments. we're also going to look at what happened under voluntary enrollment designs. for that you have to the look at job change activity. we all know that so much of the leakage is still occurring when people change jobs and, basically, cash out those accounts. so we have to take that into account. we also have to take into account the impact of hardship withdrawals and the impact of loan defaults. in addition to to everything else, basically, you need a micro-simulation model that can take into account uncertainties like uncertainties in the financial markets, and that's all going to be part of what we're going to be looking at today. very quickly, and this is from vanguard's latest report that was released earlier month, how

america saves. the two things i think people focus on the most are participation rates and deferral rate when it comes to automatic enrollment with a comparison against voluntary enrollment. and, again, much of the action has obviously taken place for the lower income individuals. if you take a look at the individuals under $30,000 in the most recent vanguard report, you see a jump in participation rates from 29% all the way up to 82%. even for those 30-50,000 you still have almost a doubling from 53% to 90%. the other side of the own coin, of course, is if you go to the right-hand side and you look at those deferral rates. deferral rate for an automatically enrolled perp under $30,000 comes in at about 3.6%, just a little bit over the 3 percent deferrals many of them have whereas the voluntary enrollment people who basically got in on their own initiative

and are probably being much more influenced by match rates are up to 5.1%. so, again, if you look at only the right-hand side, you can come away with the kind of conclusion "the wall street journal" did back in 2011 that maybe these things aren't necessarily a great improvement, but if you look at the left side at the same time and keep in mind that you would have had a number of people otherwise having no deferrals who are now showing up at least with a 3% deferrell, that goes a long -- deferral, that goes a long way to what we're going to be seeing in some of the next charts. certainly, there's been a lot of conversation about what happens with asset allocation. and for this i just want to quickly highlight some results that sarah holden from ici and i co-authored using the ebri/ici database where we looked back at what the asset allocation rate

was in 2007 and compared that to what we had for the most recent database, year-end 2014. we break this down into three different age cohorts. on the left side you see the 20s, middle is the 40s and the right side is the 60s. and in each case i'm comparing what's going on in 2007 with what's going on in 2014. if you look at that red rectangle on the bottom, what you're seeing is the percentage of equity that these participants have. in fact, back in 2007 almost one in five 401(k) participants in their 20s had zero, and this is all equity components put together. direct equities, it is the balance funds, it is the target date funds, and it is company stock. one in five had nothing in the equities market. in 2014 largely because of

automatic enrollment, harmingly because of the qdias, largely because of the shift to target date funds, you see that number's been reduced all the way to 7.7%. if you want to go to the other end to the people in the 60s and look at the green rectangle, what we find here is in the end of 2007 on the verge of the financial market collapse you had 30% of the people in their 60s that had more than 80% of their 401(k) balance in equities. because of the glide paths that many of the people have adopted in the target date funds, that number has come down appreciably and, in fact, is only 22.1% now in 2014. so not only did automatic enrollment have a huge impact on contributions and participation, but because of the fact that many of these people are being put in target date funds and

leaving that money alone for age-appropriate asset allocation, you've also seen a shift away from the extremes for both the young and the older participants. so what i want to do is very quickly give you a little bit of background on the model i'm about to take you through. we're very fortunate, ebri, we've had a collaborative effort with ici that's given us extremely detailed information. as of year-end 2014, we have participant information on 27 million individuals, so we know to the penny what they're invested in, what their account balances are, their contribution and their loan activity. that's coming from more than 75,000 different plans and represents about $2 trillion in assets. and the database is longitudinal so we can track individuals from year to year to see how their activity changes with respect to

age, wages, etc. what we've been able to do is a number of different can simulations studies like i'm about to go through with ebri retirement security projection model, we've got some results of that in the appendix if you'd like to see it. but the important point, and this is why this collaborative effort we're doing with dciia is so to important, even though we've had this extraordinarily rich database, we've never really had the plan-level data to go with it to bifurcate between automatic enrollment, for example. we've been able to get that recently from a number of different record keepers, and what i'm about to run you through just very quickly, i just want to make sure everyone is understanding what's going on. the model you're about to see will look at employee contribution activity as a function of many different things, demographic certainly, but also what's going on as far as the plan's concerned.

different plan matching formulas will have different incentives. some will stop the incentives after 3%, some will go to 6%, some will stretch it out even further. all of that is factored into this model. just as a quick note, what i'm about to show you does not include any amounts from iras or balances with previous employers, but it does allow for job change and leakages, and basically what i'm going to assume is if you're a 401(k) participant when i see you today, that every time you change jobs you will continue working for an employer that sponsors a plan. it doesn't mean you're going to participate, but at least you will continue to be eligible. we have other versions of the model that give it more of a random version. and we also have participation and opt-out simulated on an annual basis. so what i'm about to show you deals with eligible employees. okay, these are employees under voluntary enrollment that very well may choose not to

participant. and what i'm going to focus on is age 65 balances in 401(k) plans plus any rollover money that originated in the k plan. so you change jobbed, if you rolled it over to an ira, we're going to count this as part of this 401(k) bumming. it's going to -- bundle. basically, the numbers i'm going to show you are just simple multiples of final earnings. i'm going to take your accnt balance, i'm going to take divided by what you were earning right before you retired at 65 and show you the differences you're going to get between automatic enrollment and voluntary enrollment. so basically, what's the best way to try and illustrate this difference? i mean, certainly, there's a lot of debate going on. just very quickly, what i tried to do today to get something relatively simple and quick to the show to is we're going to look at improvement in simulator retirement outcomes. as i said, measured as increases

in the medians of these multiples of final pay. and i'm going to break it out for you by age and by salary quartile to see whether there are differences. many people have alleged you're going to see different types of reactions among the low income versus the middle income versus the high income. and basically, this is probably the single most important thing i want to focus on, is if you take a look broken out by age and by income quartile, so i have the middle 50% together under the red line, the blue line is the lowest income quartile and the green is the highest and also broken out by age, regardless of age, regardless of income the movement from voluntary or enrollment to automatic enrollment with auto escalation is giving you at least a 15% increase at the median. as you move from the voluntary

enrollment to the automatic enrollment with auto escalation. now, the next steps and, certainly, we're going to have to be talking about ways to improve the system sometime during the course of today'stioy leakage is going to be one of the most important things to take a look at. whether it's cashout due to job change, hardship withdrawal -- remember, that will include a six month suspension for employee contributions and, hence, the inability to get the employer match at that time -- and loan defaults. so what i want to leave you with is as the last graph is how much of a difference -- again, at the median -- do these leakages make. it should come as no surprise to individuals that the younger you are, the bigger the impact leakages will have. and because the low income are so much more likely to cash out their 401(k) balances at job

change, also you have a bigger impact for the lowest incomes. if you want to just focus very quickly, for people 25-29, the lowest income quartile, their median reduction relative to this optimized portfolio is about 15% reduction whereas it's about 9% for the middle 50% and about 6% for the highest income quartile. so overall, we've come a hong way. -- a long way. it certainly appears in terms of retirement outcomes this is going to be a big improvement over where we were pre-ppa with the voluntary enrollment, but there's still a lot that needs to be done and, certainly, leakages should be one of the aspects we take a look at as soon as possible. thank you. >> thanks, jack. that was fantastic. [applause]

so clearly, i mean, quick summary of a really comprehensive presentation, a lot of great evidence that shows that auto enrollment works more those who benefit from it, of course. you pointed out leakages as a major problem. what else would you say? if you were redesigning ppa or you were there at the table, what do you see as others' perhaps significant shortcomings? >> one of problems with ppa involves safe harbor. now, not everybody who goes automatic enrollment takes the safe harbor approach. but if you look at the safe harbor with auto escalation, there's basically a maximum cap of 10%. and if you take a look at what the individual plans are doing, this is a huge percentage -- i believe it's over one-third -- that are capping the maximum auto escalations at 10%.

i don't know the political rationale behind this, but i would say especially if you're a mid-career hire and you didn't have coverage before or perhaps you inadvisedly cashed out your 401(k) on the previous job and you're now, in essence, starting over at age 40, 10% plus whatever you're getting from the employer match is just not going to get you where you need to be. and i think if you could somehow increase those maximum limits under auto escalation, that would be a huge improvement. plus, i agree with everything that lew said, that coverage has to be the primary concern in the cases where the employer's not offering something. but for those that do, they should be allowed to escalate the employees much beyond 10%. >> okay. thank you, jack. all right. now we're going to shift to kilolo.

institute fellow at the urban institute, we're delighted to have her with us today, kilolo works with staff across the entire institute to develop collaborative partnerships with organizations and individuals who represent those most affected by economic and social issues. as of you know -- many of you know, before she joined urban, she spent many years as program officer at the ford foundation where she focused on building economic security for working families and on incorporating the expertise of people of color into all aspects of ford's work. she's been a leading thinker on retirement issues for many years, and we are delighted that she's here with us this morning. >> well, good morning. it's a pleasure to be here, and i also want to thanks a pen for inviting -- aspen for inviting me. we've heard, from our previous speakers, about the progress that's been made with pension savings since the enactment of the pension protection act.

i'm going to talk about who still has not been reached and also tee up remarks for the panel, the second panel which will discuss additional solutions that are needed. my remarks are reflective of my own views and are not necessarily the position of the urban institute where i work. i'm not going to use slides, but i did provide a handout that looks like this on the table outside because i'm going to be talking about quite a few numbers, and it allows you to follow along if you would like to. the information, the table that's in the handout is taken from the employee benefit research constitute's data comparing 2006 and 2013 percentages of all workers who worked for an employer that

sponsored a retirement plan, and similarly, there's a comparison for 2006 and 2013 of the percentage of all workers who participated in a plan. so before or and after the enactment of the pension protection act. this includes workers who have access to plans through their employers and those who do not. the data are disaggregated in several ways to get a better sense of who has access to a plan and the extent to which different workers participate. one of the first things that you'll notice is that there is generally some improvement after ebb enactment of -- after the enactment of the law, but that change is modest. and this is consistent with the research by my colleagues at the urban institute. automatic enrollment affects workers with employers who offer a retirement plan to which they have access.

it does not affect workers who do not have access to a plan through their employers. almost 49% of all workers do not work for an employer that offers a sponsor -- who sponsors a plan. so let's take a look at the groups, disaggregated groups in the table to see what that shows. there's a difference by race and ethnicity in the percentage of workers who are employed in jobs that offer retirement plans and a difference in the rate of participation. about 55% of workers have jobs with plans compared to 52% of african-americans, 36% of latinos and 48% of other groups. in terms of participation, almost 45% of white workers participate compared to 39% of african-americans, 27% of

latinos and 38% of others. african-americans and latinos are less likely to have jobs where employers offer retirement plans. discrimination in the labor market results in occupational segregation that leaves them disproportionately represented in service occupations, farming and construction. only 34% of workers in service occupations had employers with retirement plans compared with 66% of workers in professional occupations. in addition, workers of color are less likely than white workers to have earnings levels and job tenure that facilitate participation in retirement plans. factors including employment discrimination mean that workers of color are more likely to face unemployment, have longer

estimates of unemployment, work in voluntary, part-time jobs when they would prefer full-time jobs and have lower wages than white workers. the table shows that part-time workers and workers with lower earnings are much less likely to have employers that sponsor retirement plans and have much lower participation rates. only 34% of workers who are employed part time for the full year have jobs with retirement plans compared to 59% of workers with full-time jobs all year. workers participate -- i'm sorry. only 18% of participant-time workers -- part-time workers participate compared to 52% of full-time workers. with respect to earnings, only about 34% of workers earning

$10,000-$20,000 have jobs with plans, and they have a participation rate of about 17%. by contrast, 71% of workers with earnings of $75,000 or more have jobs with plans, and 67% participate. it is important to note that when workers of color and white workers are, have similar circumstances, they make similar choices. a study by the center on retirement research found that, and i quote, for comparable my situated individuals, blacks, whites and hispanics respond in a similar fashion in terms of joining a 401(k) plan and deciding how much to contribute. an ebri study showed that african-americans and white waged salary workers with the same earnings have participation rates that are nearly same. in fact, for workers earning

$75,000 or more, the african-american rate of participation in retirement plans exceeds the rate of white workers at the same level of earnings. 73% of african-americans compared to 71% of white workers participate. and for latinos, country of birth appears to be a factor. latinos born in the united states had retirement plan participation rates similar to african-american and other workers of color. but still lower than white workers. while latino workers born in other countries had rates that were much lower. so we've talked about race and ethnicity, occupations, full time versus part time, and earning levels. i'll talk about two other groups, and then i'll stop. women and men overall had

similar rates of employment in jobs with plans and participation rates that were about the same as well. but if we look at marital status, it may give us a bit more insight about what might be happening in terms of gender differences. single workers, particularly widowed, separated and never married workers, have substantially lower rates of employment in jobs with plans and participation rates compared to married workers. divorced workers overall -- or divorced workers are a bit better off than single workers. but overall these workers could be vulnerable to economic insecurity in retirement. and finally, young workers. they have much lower rates of employment in jobs with plans and lower participation rates than older workers.

49% of workers who are age 25-34 are employed in jobs with plans, and 37% contribute. and by contrast, 58% of workers ages 45-54 are in jobs with plans, and 51% participate. given the increased importance of beginning to save at very early stages in one's career, this disparity needs to be addressed. the pension protection act is important but not sufficient. there's a need to expand coverage for workers employed in -- workers employed in establishments that are offering a plan or establishments that limit their eligibility to a plan. thank you. >> thanks, kilolo. [applause] so you've laid out some pretty important shortcomings a across

a number of different factors. i'm curious if you have a thought, and i think we'll get boo this probably later in the -- into this probably later in the conversation, and also i'm sure it's going to be one of the things i'm sure we talk about in the second panel, but just to focus on one part of what you talked about, the sort of breakdown between full time and part time. you know, the economy appears to be move, you know, towards a place where many, many more workers are either not getting -- are underemployed and don't get enough hours or are, you know, the growing number of contingent workers. how do you see that playing out as we look into the future, and what kind of reforms do you think are necessary to bring all of the workers who have new contingent relationship ares into coverage? >> so i'm sure that the panel later on will address some of this, but clearly there is a need to reach employer -- smaller employers.

i think that a lot of the part-time and contingent workers are obtaining jobs with relatively small employers who are less likely to currently offer plans, so there needs to be an encouragement or a requirement for there to be more universal coverage of all workers. and even among workers or even among employers who are offering plans, they may not be providing access to some of their employees who have not had the same tenure or the, who have part-time positions within those organizations. and so that needs to be addressed as well. >> great. thank you, kilolo. okay, now we're going to shift gears -- we seem to be shifting gears a lot on this panel -- to bring in an international perspective. 're delighted to have keith

ambachtsheer from the university of toronto. keith has been a leader globally in the pensions and investment industry for more than four decades. he's an award-winning analyst of pension and investment issues who advises governments, industry, associations, plan sponsors and money managers on governance, finance and other investment issues. he's also, as many of you know, the founder of kpa advisory services and cem benchmarking which are two highly respected organizations in the global pensions and investment industry. he has a lot of experience working with countries, with funds around the globe, and he's going to bring some of that experience -- more particularly that in the launch, related to the launch of the u.k.'s recent program and this experiment that's going on in ontario, in the province of ontario. so, or keith, we look forward to hearing your perspective. thank you. >> [inaudible]

try this. yes. okay. the other comment i was going to make was to, at the border we're not non-americans, we're aliens. [laughter] i qualify twice, actually. i have a dutch passport and a canadian passport, so i'm twice over an alien. so my perspective, obviously, is to look from the outside in. and then the question is, well, how to best do that. and i think the place to start with the melbourne mercer global pension index, gpi. how many people here know about

the global pension index? about half, half of you. i think it's a terrific effort because it allows us of to have comparable conversation -- comparative conversations about retirement income systems, what's good about them, what's not so good about them and to see how we can all get better at it. the premise more this index -- for this index which was started in the 2009, i actually happened to be in melbourne when it was originally launched it was, i think, a very interesting and important occasion. it was put together by mercer actuary david knox in australia and his colleagues, actually, around the world to give it international perspective. so what drives retirement income system quality. they posit three things. one is adequate is city -- adequacy, income replacement. second criteria is sustainability, the ability of

the system to not only do it now, but to do it 10, 20, 30 years from now. and the third dimension is integrity. is the system actually well put together, is it being well managed, is it being well supervised, if you like. this initiative started with 14 countries in 2009. the last report was with 25 countries, and this year later on there'll be 27, so it keeps growing every year. the top three are denmark, netherlands and australia. the dutch used to be on top until denmark came on. it was devastation to the dutch to actually lose their first place. along with not being in the euro cup this year which is another tremendously sad event. so what's with the top three here? what does it take to get into the top three? you need a sustainable pillar, one, the government piece that

actually looks at poverty issues and covers the poverty, elderly poverty aspect of retirement. second, all three countries have compulsory participation in workplace pension plans. number two, all three countries have strong regulatory processes that cover all workplace pension plans, public sector, private sector, union, it doesn't matter. everybody gets the same treatment. and what that means is because pillars one and two are well thought out and well run, there's little need for pillar three. and pillar three is where informational asymmetry sets in which basically means if you leave people to figure it out for themselves or advised by advisers who aren't necessarily totally unbiased, then you get a lot of inefficiency into the retirement savings system m and they don't have those issues

because of the way these three countries have organized their retirement income system. so what's the usa -- where's the usa out of 25? where do you think? 14. and, basically, you get cs in all three categories. you get c for adequacy, c for sustainability and c for integrity. so you've got a ways to go. and we'll see how things turn out this year. so what comes out of this global pension index in terms of how you raise your, the bar from cs to bs and as. one, raise the minimum pension. in other words, deal with the poverty issue which is really a pillar one issue. number two, mandatory pillar two with a sensible net income replacement target for middle income workers. three, minimize leakages.

came up in the conversation already. and, four, income for life back ends to d.c. plans. in other words, don't stop at retirement. figure out how to do income for life at the back end. so that's it. that's all you have to do, and you'll become an a country in pensions. [laughter] a little bit on your closest cousins, arguably, the u.k. who had an interesting event overnight and canada. by the way, u.k. ranks number 9, canada ranks number 7, so we're somewhere in between the top and where you are. and what's interesting is that in both countries, they've both taken on this question of the middle income workers without pension plans. i mean, that's been the big thing. the u.k. went through a major research process in the 199 1990s -- in the 2000s which led to legislation which

effectively required all employers in the u.k. to offer a workplace pension plan. interestingly, offered by a private sector provider or by default n.e.s.t., the national employment savings trust which ends up with everybody if the employer doesn't make an active decision otherwise to. it's now been operating for about three years, and things are going well. it's actually unfolding, as it should. what they decided to put in their system was an opt-out option for employees, and they thought opt-out rate would be 20%. and what do you think it actually was? the ones that know can't answer, that already know can't answer. you've blown it. 6%, right? very low dropout rate. which surprised everybody by how low it was. so i think that's, you know, that's very encouraging for an approach where you have auto enrollment, and you don't want

to go totally mandatory, you want to create the safety valve. it really seems very powerful to get people in and get people savings. the 7 percent that are dropping out are rational decision, people close to retirement, entire income brackets. makes sense. so that's interesting. the great white north, your friends, your neighbors to the north. we've been dealing with the same issue, middle income workers, no retirement pension plan, what are we going to do. and this has been going on for ten years. and effectively, there's a group that says, well, we already have the canada pension plan. it works very well. it's a relatively modest system. let's expand it, you know? let's do this two things, increase the benefits, cover more income. and, but we have this rule in terms of changing the cpp/qpp, quebec does its own thing on this, is that it requires two-thirds of the provinces with two-thirds of the population as well as the federal government

to make any change. and so that's a pretty high hurdle. and so we've had a federal government for quite some time who said, no, people should figure this out themselves. so it's been a nonstarter. so ontario, a few years ago, said enough already, largest province. we're going to start the orpp, the ontario retirement pension plan, because it looks like we're never going to agree federally on anything. and so that started a couple of years ago, legislation was enacted last year. there's a process now in terms of actually creating the delivery organization. and then we had last monday. now, i don't know with all the news going on down here whether you get any canadian news whatsoever -- [laughter] but in our world something really big happened on monday. and that was there was agreement to actually increase the cpp. so we had a change in government last october. that was positive on enhancing the cpp.

and, frankly, ontario would rather do something nationally with the other provinces than do things on their own. so between ontario and the federal government and doing some further work, there was actually agreement on monday to do two things with respect to the canada pension plan. one was to increase the benefit and, number two, increase the amount of income that is going to be covered by the benefit. so it's a big deal in canada, right up there with stabilizing the cpp in the 1990s. so there's a lot of detail to be worked out as to, okay, exactly -- you get down to the bottom line, what does it all mean in terms of implementation? long window on implementation starts 2019, seven-year window to implement the whole thing. that got agreement -- that's what got agreement from the hesitant provinces, to have a very long runway.

so that now changes the conversation in canada in terms of, okay, given that we're going to do that, what else do we need to do? and it's quite a change in conversation. so good things can happen. there can be agreement between governments, apparently, if you get the right vibes. and somebody called trudeau in the room. and it happened. so where does that leave you all here? three things. one is that i think it's important to have the ideal system in mind. you know, ideally if you could wave a magic wand, what would it look like? and then, number two is realistically how close can you get there, because there are a lot of barriers, a lot of path dependency in how you got to where you are today. some of them nonchangeable. but i think still this notion of the ideal, what can we do, you know, at the margin where should we be spending our time, and it seems to me personally that, you

know, the abovety alleviation -- the poverty alleviation for seniors is one major issue that i would look at in terms of what do we do about that. and then i think with respect to middle income workers without pension plans, the question really does become is, you know, how forceful can you become about getting that participation up? and it's interesting that in the u.k., you know, they went through this, and they said, you know, you've got to mandate it. and now in canada through expanding the canada pension plan, it is mandatory. so all employers will have to be involved in this. so i think, you know, the question for you is to what degree can you require, number one, participation but also, number two, getting the contribution rate up to a level where it actually matters? where you can get the income replacement. so those are my opening thoughts. thanks. [applause] >> thanks so much, keith.

so we've got about 15 minutes left, and i want to make sure we have lots of time for -- well, lots of time, some time for audience questions. so i would say, i would like to pose one question to all of you that you can answer or not as the case may be based on things that everyone has said, right? everyone's pointed out that coverage, coverage is a huge issue. keith has just put on the table idea that the key to it internationally is compulsory participation. is that the key to it? and, you know, related to what, the way he framed it at the end which i thought was really useful, right, was like there's an ideal system in mind, and then there's realistically how close can you get there. we all know the prospects for compulsory systems in the united states are particularly challenging in the aftermath of the affordable care act. so comment, if you would, on

whether you think compulsory is a solution or what a better, what a different alternative might be that would get us there. >> you want me to start? >> sure. >> so i say to start the first thing i would suggest is we don't use the term "compulsory." [laughter] >> how about mandate? >> probably not that one either. i've been at a number of events with the folks from n.e.s.t. and others from the u.k. that were part of their reforms, and they always start using the term "compulsion." and i think, boy, that'll never sell here. [laughter] so, you know, i see david john in the room, and i know mark is going to be here later, and i think the critical thing is to think about how we build on, you know, the start that they got on the auto ira and think about the

framing in a way that makes people in policy circles comfortable with the fact that we're not talking about compulsion or a mandate, we're talking about putting in place a series of defaults that puts people on a path towards retirement security, towards success and that if we don't, we're doing the same thing, we're just choosing a negative default. we're putting them on a path toward failure. so why as a society would we do that? i mean, it just doesn't make any sense. and i think if you frame it that way, it's a lot easier to get the 90% of the way there that we can get to and not make the, you know, the search for the ideal be the enemy of good enough here. so that's my thought. >> thank you, lew. >> sure. >> i like the term universal as opposed to compulsory.

i like the sense that everyone, all workers would be covered, would have some way of providing for retirement and targeted universalism, perhaps. and by that i mean doing something for those who are the lowest earners through tax credits, expanding the saver's credit and making it refundable, something to that effect, so that there is an additional boost in terms of insuring that there is enough for them at their retirement age. >> [inaudible] >> you know, maybe this is a time where i'm supposed to remember to say my views are my own and don't reflect ebri or the trustees, etc., etc. [laughter] i think you really need to focus on how to best draw employers in

as part of the solution. we modeled what would happen if auto iras were basically available on a national basis, and of the $4.13 trillion in retirement savings shortfalls, we were only able to decrease it by 6.5%. the reason is, of course, is you don't have any employer money coming in, and you don't have any incentives for the employees to go beyond the 3%. so whether we're calling it mandatory or universal or compulsory, i think we should do everything we possibly can to incentivize the employers to become part of this process and the come in as contributions. the other thing i think you have to be really careful on is what is your objective? i mean, do you really want to have every single employee, quote, covered every single year? we look at these snapshots, and we look at a huge percentage of

individuals that don't necessarily have coverage or aren't participating in a particular year, but that doesn't mean they're going to go through their entire career without participating or without coverage. so you have to look basically over a full lifetime. and then you get9 to the end, and -- get to the end, and what is it you want to have available for these people in we fd in our modeling that a lot of individuals look like they'd be in good shape financially and then because of nursing home costs for one or both spouses, basically, the account balances are ravaged. so is it really a problem with not enough savings, or is it a problem that we have retirement expenditures that are not being dealt with sufficiently? whether it's through long-term care insurance or some government program, what have you. >> thank you, jack. >> keith, i'm going to give you the last -- [inaudible] give you the last word on this, and then we'll open it up to the audience, if that arrest okay. >> [inaudible]

>> yep. >> i think economics is really important in this, in understanding it. and the framing is really critical. i'm just going to give you an example of that. and this relates to my friend david knox who's actually been -- this goes back to the inventer of gpi. he's now on a mission to invent the back ends on d.c. plans, income for life back ends. and we just had a workshop in toronto on that. and i wrote it up, and i used, in my language i used income for life guarantees in my draft. and he came back and he said don't use the word "guarantees." use protection. income for life protection. and, again, i think it's a classic example of something that goes down a lot easier because, again, with protection it's not necessarily a guarantee. i mean, you can actually do a lot of shifting, longevity

shifting between the people that die too soon and the ones that live longer than they're supposed to without guarantees. and that's the focus. so i think that there's a whole open question of language that we use and how we rethink getting to where we want to go using language that facilitates rather than creates barriers. >> thanks, keith. that's a great point. so let's go to audience questions. i would ask -- a, i would remind you that we're on c-span. not because anybody should be should be afraid that they're on tv, but if you would, please, wait til we get a microphone, stand up and also if you would, please, identify yourself before you start. i think, melissa, did you have a hand up? do you? [inaudible conversations] [laughter] >> thanks. melissa khan from state street global advisers. and i agree with all comments me

about language. language is very important, and framing is very important, and i really liked kilolo's term about universal. lew, i'm sorry to put you on the spot. since we are a member and we support you greatly, but i'm just curious, you know, i think auto enrollment, auto escalation, changing the safe harbors is very important here, but i still think you have that gap of workers who don't work for companies, especially in the small plants in the small employer sector who don't and won't have access. so how would you get them covered? >> yeah. great question. so i think the first thing you want to do is understand, as jack was alluding to, who's left out of the system, and i think we often reflexively fall into the trap of looking at a snapshot that at any given time,

you know, there's a significant percentage, maybe an overreported percentage, but a significant percentage of the population that at that moment in time is not covered. but a significant number of those people that are not covered are going to cycle back into coverage and may be out of it and back in. so i do think it's important for us to understand through a working lifetime, you know, whether people have access to enough coverage to get them where they need to be. but that aside, who's left out? so part-time employees, as kilolo said, are clearly in a position where they're more often than not left out. we need to figure out what the incentives are in the system right now that are causing employers to leave their part-time employees off the table. i think there are, you know, rules in place, qualification rules that are probably anachronistic that we need to rethink. we need to make sure that the incentives are always to cover

people and not the leave them out. not to leave them out. but it goes well beyond that. you know, the self-employed are often out of the system, and you would think that there's a way for us to incentivize them to take care of themselves.

>> you know, ultimately i think the other thing is it may be a bit beyond the scope but we have to think about the critical role social security plays in providing for the retirement security of the least among us. social security was conceived as a social insurance program. we have gotten it thinking about it as a retirement savings program and you know, i think as part of this conversation we have to think there is going to be a portion of our population that whatever we do we will not have enough periods of coverage through working to provide for their retirement security needs. we have to make sure their security is provided through social security. i think it is a critical part of the total calculus. i don't know if others have

comments. >> other questions? >> thanks so much, everyone. i am justin king from new america. congress man crowly did a great job offering up the idea of the need for savings for a variety of needs over the course of one's life. and i would love to elisant reactions from the panel about the tension between people's emergency needs and retirement savings and whether or not there is potential to adapt the retirement savings system to more wholistically meet the needs of americans whether we can address with drawls and leakage in a way that supports family's emergency needs and the fact that life happens going

forward. >> anyone want to take that? >> that is a very good question and definitely there is the need to acknowledge people are going to have requirements for the use of savings before they get to retirement and to have multiple ways of saving and we have research that shows that people of all income levels can and do save when they have the structures in place to facilitate things like upper income households had for a long time. so there are options to have bifurcated saving strategies so some savings are going into retirement accounts at the same time some savings are going into accounts for other uses which

would be emergency savings and i think we need to keep those on the table and explore that as we go forward. >> yeah, i just want to quickly comment. i think it goes beyond programs. i think we have a real need for cultural change. we need to change the mindset and beliefs in the country around taking control of your financial future. there are programs i suggest better outside of the retirement system instead of detracting from it but i think it is really important that we get peop people-focused on a gut level for taking control of their future >> i think we have time for one more question. i saw your hand up lynn. >> first of all, thanks for a wonderful and comprehensive

panel. i wanted to just to note that what was said pointed out to me closing the coverage gap is more than just about providing options for retirement income. it is also an issue of social justice and helping us become a more perfect union. i wanted to ask jack a question about the three percent glitch in the tpa itself. isn't there somewhere in the bill, jack, where there is a reference to three percent as a starting point and you are not necessarily required to escalate through there? perhaps that legislation caused a lot of people to use three percent and create the issue "the wall street journal" story brought up. >> i haven't read pta in ten

years so i might be rusty in the details. i don't know if mark is here yet but i would bet the vast majority of the people who came in at three percent were coming in because of what was written back in the '90s when they were getting the guidance at two-three percent default was going to be okay with irs and the treasury. whether or not you are basically going to be compelled to follow three percent for anything other than safe harbor i don't think that was the intent of pta certainly. >> so, we will move on to our next thing. please join me in thanking a wonderful panel. [applause] >> ida is going to introduce

your keynote speaker. >> thanks, jeremy. i started out this morning saying there was a room full of experience and was i wrong? it has been an amazing conversation and careers dedicated to these issues and the path forward. so it is my pleasure to get the opportunity to introduce yet another one of the leaders who has emasked many years of experience and expertise to share with us. please join me in welcoming edward who i will call ed for the rest of the introduction who is president of empower retirement which is the second largest plan provider in the country with over eight million savers and 35,000 plans serving

all segments of the employer sponsored plan market. ed brings over 30 years of experience to his role with empower and has been with putnam since 2009 and in 2014 took over the role of president of empower. prior to putnam, he was head of the fine contributions and investments and prior to 2009 he was an executive leadership with fidelity for 20 years. a lot of publications, a lot of leadership already exhibited by you, ed, and also you are frequently here in washington, d.c. so i think it might be your second home speaking with congress, department of labor, department of treasury, the irs, around many of the conversations about reform, inclusion, and expansion of retirement system and their effectiveness to our policy leaders in the country. earlier this week, or was it last weeks, at the spark conference, an industry

conference here you got headlines from your call to peers in industry to speak with one collective voice on public policy issues relating to expanding and improving retirement saving systems in this country. i want to thank you for that leadership and i cannot wait to hear what you have to say. i know we have slides for you, ed. if i can invite you up and everyone give a warm welcome to ed murphy. [applause] >> good morning, everyone. thank you, ida, and thank you to the aspen institute for hosting this event. i do think it is timely particularly in light of the election and what we can expect in 2017. i think we are optimistic about the opportunity of retirement legislation. today is an interesting day at empower for us. we have 5,000 associates and we

are busy with call volumes up 25% and we have eight million americans we support. one interesting thing is unlike years ago when we had periods of volatility like this in the market we are not seeing there panic selling. i think investors, through relations they have with adv th advisors are not reacting and realize they are 20-40 year investments. i think that is good to see especially with the market down 500 points. first of all, i think this is a great group that we have here. i know many of you were involved in helping to shape the pension protection act of 2006. others are working on kind of the next generation as we look to build off the tpa. so, as ida mentioned, i have a

little bit of a multimedia show but i think it is interesting and empirical data i want to share. i will cut right to the chase and say the key to solving america's retirement challenges are right in front of our noses. first is a baseline. we must all foster the political will to make social security solvent. we heard the previous panel address this and also the congressman. beyond that in the defiant contribution saving arena we conducted a mass investing experiment for well over a generation now. the results are in. we know that it works. in fact, we can trace the most beneficial factors that lift retirement readiness directly back to the tpa itself. it's endorsement of automatic plan features, legal safe

harbors, and planned sponsor was a qualitative change in the american retirement policy. indeed, the benefits of the best practices that the tpa endorse literally jump off the page is in the lifetime income score survey that empower retirement has been conducting for the past six years. these surveys take stock of the total networth of more than 4,000 worker americans from age 18-65. it is weighted to match the u.s. census parameters. the assets we found are comprehensive. social security, planned benefits, define contribution balances, contribution rates, other savings, real estate, equity in the home, equity in small businesses to the extent that applies. our analysis then projects the share of pre-retirement income

people are on track to receive after they are out of work to generate the score. we see income replacement as the prime goal the best, the only metric of success of shortfall for any retirement system or plan. you can see on the far left of this slide we project income replacement of just 44% at the median for 20 million plus households who have no access to saving plans on the job. that was a topic of the decision of the previous panel. at the far right, nearly 11 million households who stand at the median to draw incomes in retirement well over full repla replacement. 117 percent in fact. as the dotted line shows, we

estimate the median working americans are on track to replace roughly 62% of their current incomes in retirement. clearly tens of millions of americans may face a sharp fall off in living standards in retirement or at least real financial stress and that is the challenge. but what i would like to suggest to you today is that the chart also provides us with something like a road map or an action checklist to identify priorities and solutions for america's entire retirement challenge. for example, since our data includes projected social security income, we have we can see how vital this program is and why making it solvent should be retirement faulties job one. let's take a look. here is how retirement readiness

would drop in the absence of social security. tens of millions of people would fall into destitution. many millions more would be sorely stressed. that is why all of us who care about retirement policy should urge our political leaders to make social security solvent. it is a high priority because the system is under threat and time is not on our side. many of you know roughly 17 years from now the systems own trustees project the last of the trust funds will be drawn down. all recipients will face a cliff drop of 23% or more in social security benefits. every american under the age of 48 today who plans to retire at age 65, in 2033 and beyond, faces a nasty retirement income

paycut. that is the very predictable price of inaction. let's hope the next president and congress have the courage to take on this challenge, compromise fairly and shore up the foundation of american's retirement security. let's help them do that. they need prodding, they need support for compromise and sacrifice. if people like us here today don't offer the help who will? let's come together on the most salient priority and that is getting every working american access to saving plans on the job. >> here is the difference between having a payroll deduction plan and not having one. it is pretty stark.

access alone raises income from 44 to 79 percent. at empower we believe everyone who pays fica tax should have the option to set aside part of their paycheck for retirement. data from the employee benefit research instustute shows roughly 70% of workers earning 30-50,000 dollars who do have access to workplace plans chose to save at some level. the fact it is close to 75% of those people. but among an identical cohort of moderate income workers who don't have a payroll saving plan less than five percent open up an individual retirement account. payroll deduction is 14 times more effective than the tax incentive itself. this suggests to us the only

real path to retirement readiness runs through the workplace. that is why we support robust solutions to the access or coverage gap at the national level. outre, multiple employer plans, a simplified 401-k are all critical measures we think will expand workers access to payroll savings. we know the primary reasons why small business owners do not create new plans is tied to complexity, the concerns about fiduciary responsibility can be addressed. manyf of us are working on these. savers who draw on professional advice, for example step up their median income replace rate

to 87% at the median, it remains to be scene whether the fiduciary rule will help or harm this. i think the jury is out particularly among small savers who need the advice more than every. workers whose company adopt auto enrollment in plans take a furth furth further step up. they are on track to replace 92% of their work life income. firms that go on, as they all should, to add automatic saving bring their rates to just over a hundred percent which is success be anyway measure we would agree, i think. lastly we come to the highest success category on the far right.

these workers are deferring rates of ten percent or more. this cohort of workers may be able to step up their living standards in retirement. this group isn't a tiny number of well heeled outliers. it includes 20-30 people from a variety of income levels. that is why we are pleased to see the roundtable endorse the goal through their great save ten campaign when we have been a part of. we don't expect to win the noble

prize by learning more and more and higher savings compounded over time. we think saving a target of 10% system wide is an ambitious targett and well worth pursuing. today's saving and deferl rates are just over 7%. what we are calling for with the save ten is actually a step up of nearly 40% in the savings rates of tens of millions of americans and washington, d.c. plans today. let's face it, we don't serve anybody well by allowing them to believe that they are on track for retirement readiness at saving rates of 3-7 percent. if americans want financial security for 20-30 years after their work life ends we will have to save more and a lot of more than we are doing today.

let's just tell people the truth. you might think that what lifts people to the solid readiness we are seeing on the far right is sheer income but that is not the case. it is true higher income people are somewhat more able to save. though surprisingly a large number of higher income people don't. our survey finds plenty of low and moderate income people reach high levels of readiness because of the features that get them v engaged in saving. plan and design matters critically. it is possible and should be our goal to create a define contribution scientiystem that

success easy and failure hard. one example from the survey suggests that it may be gaining traction. we are seeing an uptake in the retirement of millennial to 81path in this year's survey. we suspect many are adopting on enrollment. we see that in our own business particularly for new hires. we will watch to see if we we consistency and momentum going forward. i don't think we need a lot more data to tell us, americans have

been living through this experiment over the past years. we simply must spread the best practices found in the define contribution universe as widely as humanly possible. access itself is vital. having nearly 50 american people outside of the system is a scandal. besides coverage, we need full auto plan design as universal as possible. at empower we feel a fiduciary responsibility. because our data tells us we can really solve the accumulation of the retirement challenge just by implementing the proven successes that tpa helped foster.

once we do that we should move on to finish the job that the tpa started and that means solving for the distribution phase. the next slide i want to touch on at empower we call our vision for the next generation of workplace savings in the country workplace saving 4.0 because it follows three previous sometimes overlapping generations of workplace savings. one dot if you will was the initial explosion from the mid 80s to 90s. workplace 2.0 took place in the mid 90s who progressive sponsors and providers started experimenting with features and trying out auto enrollment and saving escollation.

workplace 3.0 began in 2006 with the pension protection act and codified these best practice. but today with nearly 10,000 baby boomers moving into the retirement every day we are entering a new phase in the evolution of workplace savings. we still have to finish implementing tpa endorsed best practices, take the system to a new level and move on to solve the new challenge of lifetime income. this slide shows our workplace 4.0 agenda in a nutshell. we start by preserving all existing savings incentives and seeking to correct the bogus scoring method that make retirement savings such a juicy target for budget hawks. this is for honest arrhyithmeti

and distinguishing between tax referls and tax expenditures and doing that before any tax reform. closing the access gap at the national level is the next goal. we will actively support regulatory and legislative measures to do that. through ira, simplified 401-k, employer plans. favoring a more generous and refundable tax credit to encourage employees to establish plans. we support efforts to engage the large and growing share of the workforce doing part time work or contract work. that is the big challenge because these workers have no regular w2 payroll in come to take deductions for from. they need strong incentives to engage in retirement saves.

it is time for regulators and legislatures to guide, nudge, mandate the adoption of full auto plan designs. these designs are qualitatively better than purely voluntary plans without auto features. they are more prospects of helping workers attain readiness. in short, they work. to get to a full auto system will require new legislation and stronger safe harbors for planned sponsors who do the right thing. and we need to continue efforts already underway led by the treasury to make it easier for workplace saving plans to include guaranteed or as keith would say protection income options. annuity, longevity insurance,

garn uarante guaranteed draw down plans will be critical. we would favor a tax preference allowing workers to draw the first 10,000 a year in guaran e guaranteed income tax free. we believe congress should help by allowing tax free with drawls to cover medical expenses and health insurance. these changes will go far to fleshing out the next generation of workplace savings in america. i want to close by emphasizing the great opportunity that all of us in retirement services have to make this country more prosperous, more dynamic, and

indeed more just. keeping the promise of dignified retirement after a lifetime of work is not just a decent goal to fight for. it is the way to turn what could be a crisis into an opportunity for reviewed growth and national confidence. imagine an america in 2020 where every worker has strong incentives to save and plans designed to actually deliver a dignified retirement. with those savings flowing through the market to finance growth, entrepreneurship and job creation. imagine a country that knows that it can meet real challenges because it has just done so. that is what is solving our retirement challenge could do for america. so let's go from here to empowerment. let's set the agenda for change and