WASHINGTON—A new national initiative is being launched to address the fact that more than half of Americans are not saving enough for retirement.
The Financial Services Roundtable has introduced “Save 10,” which it is describing as a business-to-business, peer-to-peer effort to encourage responsible employers to help their employees better prepare for a secure retirement by enabling them to save 10% of their income.
“One of the best ways to increase retirement savings in America is through employers,” said Tim Pawlenty, CEO of FSR, in a statement. “Save 10 will be an easy way for workers to think about saving. There are many companies helping to put their employees on the right path to savings and Save 10 will recognize those employers in an effort to encourage others in the marketplace to follow suit.”
According to FSR, one of the cornerstones of Save 10 is to encourage “auto-save” programs, such as auto-enrollment in a retirement plan upon being hired and auto-escalating an employee’s savings contributions as income rises. Nearly 82% of employees save for retirement when their employers offer an auto save program – compared with just 64% when employers do not, according to FSR. Save 10 aims to fundamentally change these facts, FSR added.
Approximately 59% of defined contribution plans use automatic enrollment – or Auto Save – to help employees save more for retirement, leaving room for growth. Auto Save allows employers to automatically opt-in their employees into a retirement savings plan and is one of the biggest factors of savings success.
According to FSR, to be considered for recognition as a Save 10 employer, companies will certify that they engage in certain activities that qualify them as Save 10 certified. This includes offering a retirement plan, contributing to employee retirement accounts, ensuring employees can “keep 10” by providing access to disability and life insurance plans and other criteria. More info is available at www.save10.org
Companies who have committed to being early ambassadors for Save 10 include: IBM, Franklin Templeton Investments, MasterCard, Milliman, Cargill, United Technologies, Allstate, AXA, First Horizon National Corporation, LPL Financial, Nationwide, Popular Community Bank, Principal, Putnam Investments, Quicken Loans, SunTrust, TransAmerica and Unum.