MassMutual CEO Roger Crandall Advocates New Retirement Savings Incentives for Both Employers and Their Employees

Speaking before the U.S. House Ways & Means Committee, Crandall
supports bipartisan legislation to make retirement plans more widely
available and increase retirement savings

WASHINGTON–(BUSINESS WIRE)–Roger Crandall, Chairman, President and CEO of Massachusetts Mutual Life
Insurance Co. (MassMutual), on Wednesday advocated for legislation
before the U.S. House Ways & Means Committee that would make it easier
and less expensive for employers to provide workplace retirement plans
while encouraging workers to save more for their own retirements.

Crandall was invited to speak before the Committee by Chairman Richard
Neal (D-MA), who represents the Western Massachusetts congressional
district where MassMutual has been headquartered for nearly 168 years.
The Committee hosted a hearing on retirement security during which
legislation was discussed aimed at making it easier and less expensive
for small businesses to offer workplace retirement plans such as
401(k)s. MassMutual is a leading provider of 401(k)s and other workplace
retirement plans, serving approximately 30,000 employers and three
million retirement savers nationwide.

“Workplace retirement plans, like 401(k) plans, are very effective in
enabling American workers to save for retirement. But millions of
Americans, especially those working for small employers, still do not
have access to a workplace retirement plan,” Crandall said in his
testimony. “There is extensive data that the costs and complexity
associated with starting a retirement plan are the biggest obstacles
preventing more employers from offering a retirement plan to their
employees. With Congressional leadership and private sector innovations,
we can address this problem together.”

In his testimony,
Crandall said MassMutual supports the following key legislative
initiatives:

Enacting the collection of legislative proposals known as the
Retirement Enhancement and Savings Act (RESA).
RESA would greatly
decrease the cost of retirement plans for small employers, and would
open up retirement plan coverage options for the growing gig economy.
This is excellent bipartisan bicameral legislation and it is time to
enact it. RESA would expand workplace retirement plan coverage by
allowing so-called open multiple employer plans or “open MEPs,”
expanding small-employer tax incentives designed to help offset the
costs associated with establishing a new workplace retirement plan; and
simplifying and streamlining plan administration. “Open MEPs” would
permit unrelated employers to join together under a single retirement
plan to harness economies of scale and reduce unnecessary administrative
burdens.

Increasing retirement plan availability and savings by reducing the
costs and administrative burdens typically associated with starting a
retirement plan.
Crandall endorsed legislative provisions to offer
tax incentives for small businesses, like the small employer start-up
credits improved by RESA. In addition, he proposed making it easier for
employers to correct inadvertent plan administration errors; consolidate
and simplify disclosures to retirement plan participants; and make it
easier for employers to comply with complex rules that can be difficult
and costly to administer under current law. Each of those changes would
make it less costly for employers of all sizes, but especially small
employers, to offer workplace retirement plans, according to Crandall.

Providing new incentives for workers to save more for retirement by
enhancing retirement savings credits for those who contribute to
retirement accounts and by promoting greater use of automatic savings
features.
Through automatic contribution features, employees
automatically contribute a portion of their paycheck to their workplace
retirement plan – and potentially increase savings rates over time –
unless the employee expressly elects not to have contributions made on
their behalf. Automatic enrollment and automatic escalation have been
powerful tools in encouraging employees to save for retirement, Crandall
pointed out.

Eliminating coverage barriers and increasing savings for populations
that currently experience disproportionately lower retirement savings
rates.
RESA would make it easier for employers offering 401(k) plans
to allow long-term, part-time workers to contribute to the plan,
enabling them to close their retirement savings gap, Crandall noted.

“These retirement challenges impact everyone, but we also know that
certain populations experience disproportionately lower retirement plan
participation and savings rates – most notably, women, minorities,
low-income employees, and small business employees,” he said.
“Additional efforts should be made to increase retirement savings for
these particular populations.”

Supporting proposals to facilitate and encourage lifetime income
solutions.
With ever-increasing life expectancies and the shift away
from traditional defined benefit plans, it has become increasingly
difficult to predict how much money any given employee will need in
order to meet his or her financial needs throughout retirement, and to
make those savings last a lifetime, according to MassMutual’s CEO.

“These problems, like others already discussed, can be particularly
troubling for the retirement security of women, who tend to live longer
than men,” Crandall said. “To combat these uncertainties, steps must be
taken to promote lifetime income solutions.”

The proposals in RESA would do that by making lifetime income options
more portable, according to Crandall. In addition, RESA would create
protections for employers who make lifetime income options available
under their plan but also by including other own innovative solutions,
like making it easier for retirement savers to purchase longevity
insurance and preventing retirement savers from having to unnecessarily
withdraw their savings at age 70 ½, as required under current law,
unless they are ready to do so.

Additionally, Crandall recognized Chairman Neal for introducing the
Automatic Retirement Plan Act (ARPA) last Congress. Crandall called
Neal’s bill “a bold and innovative solution – based entirely on a
private sector solution – to reduce the coverage gap.” Crandall also
added that “legislative action” is needed on ARPA and said it was his
“hope that the private sector, including the small business community,
can participate constructively with the Chairman (Neal) to identify ways
to move this bill forward in a bipartisan manner that broadens
retirement plans coverage.”

As part of its mission to promote financial well-being, MassMutual is
introducing a new workplace financial and benefits planning tool –
MapMyFinances — to help workers assess their personal financial needs
and make the best choices regarding short and long-term financial goals.
MapMyFinances will be offered at no charge to the millions of Americans
MassMutual serves, providing prescriptive guidance that prioritizes
emergency funds, college funding, life and income protection, healthcare
and retirement savings in accordance with each worker’s individual needs
and budget. MassMutual is also working to expand retirement plan
coverage among small employers by introducing a new 401(k) plan, Aviator
Pro, which is simpler and less expensive for smaller employers.

“MassMutual strongly supports the Committee’s efforts to eliminate
barriers to workplace retirement plan coverage and increase retirement
savings,” Crandall highlighted in his testimony. “As the Committee
continues to develop new ways to help more Americans adequately save for
retirement, we look forward to working with Chairman Neal, Ranking
Member (Kevin) Brady (R-TX), and other Committee members to help all
Americans reach a financially secure retirement.”

About MassMutual

MassMutual is a leading mutual life insurance company that is run for
the benefit of its members and participating policyowners. MassMutual
offers a wide range of financial products and services, including life
insurance, disability income insurance, long term care insurance,
annuities, retirement plans and other employee benefits. For more
information, visit www.massmutual.com.

Contacts

Laura Crisco
413-744-2370
[email protected]

David Potter
860-562-1525
[email protected]

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