Candidates Should Talk About This Crisis

Presidential candidates are busy staking out positions on issues ranging from foreign affairs to the regulation of fantasy football. But one critically important issue has been largely overlooked in the campaign so far. It’s an issue that profoundly impacts the current or future well-being of nearly every American. The issue is the pressing need for Americans to better prepare for their retirement or life after they no longer are able to work.

According to the Federal Reserve, 31 percent of Americans are currently saving nothing for retirement and will be forced to rely on Social Security as their only source of retirement income. Gallup’s most recent Economy and Personal Finance survey reports that 36 percent of workers expect Social Security to be a major portion of their retirement income. But Social Security payments alone may not be enough for many workers.

Beyond Social Security, most people are not saving nearly enough. According to a 2014 Employee Benefit Research Institute study, 36 percent of Americans have less than $1,000 set aside for retirement and 60 percent have less than $25,000 saved. And of the 62 million women working, just 45 percent are participating in a workplace retirement plan.

The candidates on both sides of the aisle have discussed policy proposals regarding Social Security and tax reform and how those issues may impact retirement savings. However, candidates have not yet taken the opportunity to discuss what the current private market could do to better address the retirement savings problem and there is more that can be easily done to help people better prepare for retirement.

Current law allows employers to “automatically enroll” employees in company-sponsored retirement savings plans. When companies do auto enroll their employees, participation rates increase significantly, employees save more and employees seem to appreciate such an approach. Vanguard reports that 91 percent of workers participate in company sponsored plans when auto enrollment is utilized while only 42 percent participate when auto enrollment is not offered.

Employees, of course, retain the right to opt out of the program, but most do not. Plus, studies show auto enrollment disproportionately increases participation rates among younger, female and minority workers. According to Retirement Made Simpler, it is not uncommon for participation rates for those groups to jump from about 20 percent participation to 80 percent or more.

The Mall of America is a great example of how auto enrollment can benefit employees. When the Mall implemented auto enrollment in their retirement plans, employee participation jumped from 20 percent to almost 90 percent. Most of the newly enrolled are modest-income employees, and the Mall provides a 100 percent match on the first 5 percent of contributions. The bottom line is the Mall is using automatic enrollment and a matching contribution to help provide a brighter future for their employees.

Presidential candidates are in the unique position to shine the spotlight on these issues. They should use their campaign bullhorns to encourage companies to help their employees by using auto enrollment. It will help build a brighter future for millions of Americans and it will make our economy and country stronger.

Gov. Tim Pawlenty is the President & CEO of the Financial Services Roundtable. The Financial Services Roundtable represents the largest integrated financial services companies providing banking, insurance, payment and investment products and services to the American consumer. Learn more at

Morning Consult