Americans Face Alarming Retirement Savings Shortfall, According to National Institute on Retirement Security Testimony Before U.S. Senate Committee
The Move Away From Pensions Is a Major Culprit in the Nation’s Retirement Crisis
WASHINGTON, D.C., February 29, 2024 – Most Americans will not have enough money for a financially secure retirement, and they are worried about it was the testimony of Dan Doonan, executive director of the National Institute on Retirement Security (NIRS) at a hearing before the Senate Health, Education, Labor, and Pensions (HELP) Committee.
“We’re encouraged that the Senate HELP Committee is taking a hard look at the retirement savings shortfall facing far too many Americans,” Doonan said. “The data clearly suggest that we need to rethink our nation’s retirement infrastructure because the current system is leaving the middle class behind. Finding solutions to ensure Americans have access to pensions, defined contribution plans, and Social Security is the best path forward for employers, employees, and the economy.”
Watch the HELP Committee hearing, “Taking a Serious Look at the Retirement Crisis in America: What Can We Do to Expand Defined Benefit Pension Plans for Workers?”
Read Doonan’s oral remarks delivered to the HELP Committee.
Read Doonan’s written testimony submitted to the HELP Committee.
In his testimony, Doonan detailed the scope of the retirement savings shortfall. He noted that NIRS research found that for Generation X, a generation that is quickly approaching retirement and the first that will retire largely without pensions, the bottom half of earners have only a few thousand dollars saved for retirement. This means the vast majority of Gen Xers are not even close to having enough savings to retire. And when Americans don’t have adequate retirement income, they are more likely to fall into poverty or turn to public assistance programs or families to make ends meet.
The NIRS testimony submitted to the HELP Committee indicates that the move away from pensions is a major culprit in the nation’s retirement crisis. While 401(k) plans are an important part of the retirement equation, they just weren’t designed to replace pensions. The testimony also indicates that serious policy discussions about rebuilding retirement security for Americans must include increasing pension coverage as part of the solution. Research finds that pensions not only provide reliable lifetime income for employees, they are economically efficient, they provide workforce benefits to employers, and they provide substantial economic impacts to communities across the nation, especially rural areas.
The National Institute on Retirement Security is a non-profit, non-partisan organization established to contribute to informed policymaking by fostering a deep understanding of the value of retirement security to employees, employers, and the economy as a whole. Located in Washington, D.C., NIRS membership includes financial services firms, employee benefit plans, trade associations, and other retirement service providers. More information is available at www.nirsonline.org.
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