The legislation Warner and Hines introduced in 2018 limited PRIA investments to a lifecycle fund, which was defined as a fund that “is comprised of an appropriate mix of index funds.”
“We recognize and appreciate that the [new] proposal does not incorporate that definition, and we would oppose limiting the definition of lifecycle funds to include only index funds,” Bernstein said. “We encourage you to define permissible investments in PRIAs in a manner that does not limit investors’ choices to index funds but recognizes the value of active investment management to investors and the markets.”
According to Warner and Hines, fewer workers are staying at a single employer than in the past. “The current retirement savings system is not working for most Americans,” Warner said. “It is too reliant on employers and leaves too many people behind. Most accounts are employer-sponsored, but not every business offers a plan and, more often than not, part-time and contract employees are not eligible for these accounts."
According to the Bureau of Labor Statistics (BLS), only 49 percent of Americans have access to a retirement account and contribute to it, while 35 percent have no access and 17 percent have access but don’t contribute, meaning more than half the country is not saving any money in a retirement account.
The dearth of retirement savings is likely to accelerate as 40 percent of Americans work outside of traditional full-time jobs by 2020, according to a study by the Minneapolis Fed.