mr. vanderhei and ms. miller if you would, my sense is the small business folks at home, my people i talk to, tell me there are impediments and obstructions into both the employer and the employee being able to contribute to what might be a more open, flexible and i think you called it creative plan, ms. miller. if you had to identify the greatest impediment that the government puts in place to either the employer or the employee for setting up a flexible, responsive retirement plan, what would that be? mr. vanderhei? >> i'll focus on the responsive part of that. one of the major improvements we've had in this the retirement system in this country, certainly since 2006, is the increase adoption of automatic enrollment and automatic escalation of contributions. for a variety of reasons, a number of employers have adopted a safe harbor approach. this automatic escalation. which unfortunately currently has a maximum cap of 10%. i think if you talk to most financial planners, they would say that in addition to

mr. vanderhei and ms. miller, you both state in your testimony that despite what some may claim, studies show that current tax incentives for savings, for retirement, are quite progressive. what would be the effect on progressivity if you lowered the top marginal rate to 25%? >> that's a very complicated question, and depends in part on what else you've done when you've lowered the marginal rate to 25%. it is a fact that as the top rate declines, there is less incentive for tax deferral. because you're saving less money when you contribute. if that -- but there are other competing ways to save. it depends in part on what's happening with capital gains and dividends. if you have no tax to be paid on an investment, as david would like to see generally, then it becomes very difficult to incentivize an employer to put in a plan, unless you specifically have a targeted tax credit or some other specific benefit to encourage that employer to put in a plan. so i think that this is something that is particularly se

mr. vanderhei, would be able to afford a comfortable retirement. more than half of all workers reported that they had not calculated how much they would need to live during retirement. you are not in your head in agreement. those are pretty unbelievable numbers. i find out, anecdotally, i have a friend who is a lawyer who took a 401k plan and put it into an ira, he ultimately put his ira into a real estate investment with a third party. pretty sophisticated, and doing very well according to him, versus others who have not quite an understanding of how much it has been talked about before. how much they can put in because the contribution limits are what they can put it in. my question to all of you, and i will start here on my right, is whether it is simplification or reform or whether it is -- whatever it is. how do we get more americans to change that 14% number so that they have a better understanding and can make better choices and can have that 14% number be something substantial, like 75% of americans feel they can comfortably live in retirem

mr. vanderhei and ms. miller come to you both stay in your testimony that despite what some may claim, studies show that current tax incentives for savings for retirement are quite progressive. what would be the effect on progressivity if you lower the top marginal rate declined by 8%? >> that is a very complicated question and depends in part on what else you've done when you've lowered the marginal rates to 25%. i mean, it is the fact that at the top rate declines, there is less than done it for tax deferral because you are saving less money when you can tribute. but there are other -- competing ways to save that depends in part on what is happening in capital gains and dividends. if you have no tax to be paid on investment as david would like to see generally, then it becomes very difficult to incentivize an employer to put in a plan unless you specifically have a targeted tax credit or some other specific benefits to encourage the employer to put in a plan. so i think that this is something that is par

mr. vanderhei, we begin with you. >> members of the committee, thank you for the opportunity to speak with you today on tax accounts. i am a research director of the employee benefit research institute. we have conducted research for the past 34 years. ebri does not take policy positions or lobby. we have extensive research or the last 13 years as well as annual analysis on the behavior of tens of millions of participants from tens of thousands of plans dating back as far as 1996. measuring retirement income is an important and complex topic and ebri started to brightness in the 1990's. 43% of households were projected to be at risk of not having adequate income for basic expenses and health care costs. even though this number is large, this is 5% to 8% lower than 2003. it would be my pleasure to explain why households are better off today than they were nine years ago, even after the crisis in 2008 and 2009. the in positive impact from automatic enrollment in 401 k plans. a similar analysis for 401 k plans. the number of years they are eligible makes a tremendous difference in their times