Calls for mandatory savings plan arise

Senator Tom Harkin, an Iowa Democrat, will file a bill calling for automatic enrollment in a retirement plan.
J. Scott Applewhite /Associated Press/File 2013
Senator Tom Harkin, an Iowa Democrat, will file a bill calling for automatic enrollment in a retirement plan.

NEW YORK — BlackRock’s Laurence D. Fink, head of the world’s largest asset manager, says that US employers should be required to put money aside for their employees’ retirement, similar to what is done in Australia’s superannuation system.

‘‘The current system is not working, and we need a comprehensive approach that includes some form of mandatory savings in addition to Social Security,’’ Fink, chief executive of New York-based BlackRock, said last week at New York University’s Stern School of Business. ‘‘The longer we wait to fix it, the tougher the task becomes.’’

In Australia, employers must contribute at least 9 percent of part-time and full-time employees’ income into accounts that belong to workers.


In the United States, Senator Tom Harkin, an Iowa Democrat and chairman of the Senate Health, Education, Labor, and Pensions Committee, said he plans to introduce legislation this year to require businesses that do not offer a pension or 401(k) plan with a company match to automatically enroll workers in a so-called USA Retirement Fund.

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A mandatory retirement savings system would have to be phased in gradually and would relieve pressure on the federal budget, Fink said.

The US Department of Labor said it is seeking comments on a proposed rule that would require 401(k) plan sponsors to include in workers’ quarterly or annual statements an estimate of what their current or projected savings looks like as a monthly stream of payments.

The government is trying to keep people from outliving their savings, because employers have shifted to 401(k)-type plans, where workers are responsible for investing their contributions, from traditional pension plans, which guarantee income after retirement.