EBSA Press Release: Labor Secretary Alexis M. Herman Releases Report on Retirement Savings: Americans Need More Education about Saving [09/03/1998]

Archived News Release — Caution: Information may be out of date.

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Businesses, governments and the media must all work to educate the public about saving for retirement, concludes a report issued today by Labor Secretary Alexis M. Herman. Americans are not saving enough and they need more information to encourage them to do so, according to the report of the first National Summit on Retirement Savings, which was held June 4 - 5.

"We must do a better job of educating the public about the importance of saving and the tools which can help them," Herman said. "The dream of retirement may be lost to many Americans unless we act."

The report to the president, congressional leadership and governors summarizes the proceedings of the summit, which was attended by 250 delegates representing the leadership from both political parties, large corporations, small businesses, labor organizations and numerous trade groups dealing with employee benefits, personal finance and retirement issues. The summit is one of three such meetings mandated by the Savings Are Vital to Everyone's Retirement Act (SAVER) of 1997.

Delegates focused on three areas for education: encouraging those who are not saving at all to start saving; teaching young people the value of saving; and helping those who already are saving to understand how much to save and what vehicles for saving are available to them.

To increase public education, delegates called on businesses to sponsor retirement plans and educate employees about the importance of retirement savings; states to launch their own retirement savings initiatives; the federal government to increase its education campaign; and the media to take a more active role in informing the public about retirement savings.

The report also covers barriers people face when saving for retirement and the challenges employers face when providing retirement plans. In addition to lack of knowledge, people make wrong assumptions about their retirement, both in terms of the amount of money they will need and the number of years they are likely to be in retirement. Attitudes and social values which do not support planning for the future also limit retirement planning. For their part, employers, especially small businesses, are put off by the complexity of establishing employee retirement plans and a perception that the costs are too high.

The delegates also recommended some steps in addition to education to overcome these barriers, such as government incentives to small businesses to start retirement plans and more pension counseling for workers. Follow-up summits in 2001 and 2005 will measure the progress of efforts to improve retirement security for American workers.

A copy of the report may be accessed on the Department of Labor's web page at www.dol.gov/dol/pwba.

Archived News Release — Caution: Information may be out of date.