<\/p>\n
Chantel Sheaks, VP for Retirement Policy at the U.S. Chamber of Commerce, breaks down the current retirement landscape: why small businesses struggle to offer plans, how Social Security and private savings interact, the impact of rising costs on contributions, and practical policy and employer-side solutions \u2014 from auto-IRAs to cash-balance plans. A must-watch for employers, policymakers, and anyone thinking about retirement readiness.<\/p>\n
Jeffrey Snyder, Broadcast Retirement Network<\/p>\n
Joining me now is Chantel Sheeks. She is the Vice President for Retirement Policy at the U.S. Chamber of Commerce. Chantel, always great to see you. Thanks for joining us this morning.<\/p>\n
Chantel Sheaks, U.S. Chamber of Commerce<\/p>\n
Oh, not a problem at all.<\/p>\n
Jeffrey Snyder, Broadcast Retirement Network<\/p>\n
You know, I love the Chamber of Commerce. I’m a big fan, and I know you guys do a lot of work, especially lately with small businesses. Before we get into retirement policy, I have to think that, like many of us, affordability remains a big issue for a lot of businesses, but especially some of those smaller businesses out there.<\/p>\n
Chantel Sheaks, U.S. Chamber of Commerce<\/p>\n
Yeah, and that’s part of it. You know, I think when we want to frame the discussion around retirement, that it’s not just with the employer and the employee, looking at them together. And one of the things I’ve been doing since I’ve been at the Chamber is asking the industry to take a step back and look at both the plan sponsor, the employer, and the employee more holistically, is that we look at the cost of healthcare.<\/p>\n
Healthcare went up 10% last year, and we’re looking at the cost of living going up, we’re looking at education going up, and there’s only so much that both our employers and our employees have. And when you’re looking at a small employer, a small employer is not out there saying, I don’t want to save. It’s the question of, how do I save?<\/p>\n
And where is this on my priority? When we look at a small business, they’re just trying to keep the lights on. So even though we do this for a living, other people don’t.<\/p>\n
And so I really want people to keep that in mind and also keeping in mind just where the people are with their needs and their wants. And I don’t think there’s anybody else who thinks, oh, I never want to save anything for retirement. But there are a lot of people out there that just can’t.<\/p>\n
So I think that’s a reality that we really need to look at and where the other savings could be.<\/p>\n
Jeffrey Snyder, Broadcast Retirement Network<\/p>\n
Yeah, and I’m sorry to interrupt you. I was gonna say, I completely agree. And I think if you talk to a person on the street, anybody, they’ll say, yeah, I know I need to save, but I can’t because I have this, this, this, and this.<\/p>\n
But there were some recent announcements. I was kind of joking with you off camera or in the virtual green room that I’m excited because retirement is taking a big part of the agenda, at least recently. We had private markets.<\/p>\n
We had that new Department of Labor regulatory guidance. We had, and now we have this trumpira.gov. So I’m excited by that. But to your point, maybe we need to all take a step back and say, what can we do to lift everybody up?<\/p>\n
Chantel Sheaks, U.S. Chamber of Commerce<\/p>\n
Yeah, and I would completely agree with that. And that’s another thing that, I’m always excited, you know me. You can always call me.<\/p>\n
I wanna talk about retirement anytime. And even my friends think that I probably shouldn’t. But looking at the person holistically is another thing that we’re starting to look at.<\/p>\n
And we want Congress to start looking at is when people ask me, they’ve said, well, we wouldn’t get universal coverage in 401k plans, IRAs and all of that. And I said, but we already have a system that has 98% coverage, the social security. And social security and the private markets work together.<\/p>\n
And unfortunately, just like we’re not looking at the small business and we’re not looking at the employee, we’re not looking at them holistically when it comes to healthcare, education, all the other things I have to say for. I think sometimes those of us in the industry forget that individuals look at social security and their private savings together. So how should we look at social security and the private savings for different segments and different segments are going to need different things.<\/p>\n
So how do we address that?<\/p>\n
Jeffrey Snyder, Broadcast Retirement Network<\/p>\n
So should we, I guess this is more of a theoretical question, but should we be focused? You mentioned social security. Obviously there’s a lot of talk.<\/p>\n
You’re in Washington, DC. So you probably hear a lot of it when you talk to people on the Hill about social security, the fact that it’s going to, the trust fund is gonna be challenged by 2030, 2032, maybe even sooner. So rather than maybe this focus on the trumpira.gov, which is more of a universal coverage issue, we should focus on trying to true that up and clean that up a little bit. Well, and I do think we, well, we can walk and chew gum. We can do both. I was just thinking of that analogy too, as you were, I’m like, we probably can do both, right?<\/p>\n
Chantel Sheaks, U.S. Chamber of Commerce<\/p>\n
We can do both, but we, unfortunately, unfortunately people today are only doing one. They’re only walking or they’re only chewing gum and we can do both at the same time. We also do need to focus first on social security because there are a lot of different fixes that are out there.<\/p>\n
There’s tons of proposals. And unfortunately people are not talking about social security. I am, I’m actually giving a Hill briefing on Thursday morning about the employer’s role, which is very, very important.<\/p>\n
And the employee and the employer, many proposals out there would increase the payroll tax. But now if you think about this, if I have to increase my contribution to social security by 1% and the employer has to increase their contribution by 1%, that 1% has to come from somewhere.<\/p>\n
Jeffrey Snyder, Broadcast Retirement Network<\/p>\n
My salary.<\/p>\n
Chantel Sheaks, U.S. Chamber of Commerce<\/p>\n
It’s coming from your salary. Yeah, sorry, I said that out of my breath, but I think we’re off the line there. Go ahead, I’m sorry.<\/p>\n
People think it like magically just comes from somewhere. And if I have to have some leave, if something else has to give, if I’m an employee and I’m doing the right thing, I’m contributing to my 401k plan, but I’m still, it’s kind of tight. It’s going to come from my contribution, which is unfortunate.<\/p>\n
If the logic would dictate, well, I have to pay this much more. I’m not gonna skimp on my health because I have to have healthcare. I can’t do anything about taxes because taxes and death, those are the only two things that are certain in life.<\/p>\n
And then you look on the employer side. And if I’m the CFO and I’m sitting there thinking, I’m like, okay, wait, wait a minute. I need to come up with another 1% of payroll.<\/p>\n
Well, this has to do with, this is wage and compensation. That’s just, that’s one bucket. That’s how they look at it.<\/p>\n
And we want to start talking to employers right now to say, where would that come from? Would you cut the match? Would you cut the non-elective contribution to try to get that money, to make up for that money?<\/p>\n
So we would now have employees who, okay, you’ve leveled out social security, but now you’re down 2% on the private side. That’s not helpful. So how can we make it so that you don’t have to have that Hobbesian choice?<\/p>\n
And what we’re trying to say is, I can come up with 1% if I can do it over 10 years. Maybe longer. I can’t come up with that 1% if I have to come up with it overnight.<\/p>\n
And so that’s what we’re trying to do is to try to get that conversation going so that people can continue to save the way that they’re saving today. Because one of the things that I do think though is interesting is the system that we have today, and I wish we would hear this a little bit more, it’s actually working pretty well. And there are a lot of options out there.<\/p>\n
I don’t necessarily think a government run option is, we’ve got one that already works pretty well, it’s called social security. The private sector has actually done really well on the private savings front of it. And I was looking at a few statistics, it’s 72% of private sector workers have access, but only 53% of them participate.<\/p>\n
So when I’m looking at that access, is the question to me is access necessarily the problem? IRAs have existed since 1974, they were originally part of ERISA. There’s access on that, so what’s the disconnect?<\/p>\n
Jeffrey Snyder, Broadcast Retirement Network<\/p>\n
Well, wouldn’t the disconnect be the affordability that we were talking about earlier? So if 74, I forget the exact number you just quoted, but if 74% of people had access, but they’re not contributing, I don’t think there’s a lack of knowledge, I think people or information out there, but don’t you think that the real crux of it is that going back to the beginning of our conversation, which is maybe they don’t have the ability to contribute. I mean, sorry, but just to take it in a different direction, I mean, we saw these state auto IRA programs, California, Oregon, there are many others, they’ve been fairly successful at getting small employers.<\/p>\n
So the system’s working.<\/p>\n
Chantel Sheaks, U.S. Chamber of Commerce<\/p>\n
Yeah, and I do think that, I think it’s a good start. I think that the state plans are a good start, but I don’t want us to think that it’s the end, that the contributions, we’re looking at the statistics that I found, employees have about a 5% to 6% contribution rate. And we do think that the way to go is if an employer can do it, which we can talk about a little bit later, because I do think the private market finally has realized that there is a market out there for the small employer, and we’re going to see an increase in coverage, because unfortunately the state plans are just, they are really good savings devices so far.<\/p>\n
I was looking at the average balance of some of the older programs that are out there for California, Illinois, and Oregon, about 2,700 in California, 1,900 in Illinois. Oregon is coming in about 2,900. Again, that’s a start.<\/p>\n
But to me, in some ways, that looks more like a savings program and not a retirement program. Which is also fine too, because I think if individuals are saving, it’s great however they’re saving. But I don’t necessarily think that that’s, we can say our job is done if an average balance is $1,900.<\/p>\n
Jeffrey Snyder, Broadcast Retirement Network<\/p>\n
So do you ever envision, a lot of talk about, you get this all the time in terms of different points of view, but bringing back the defined benefit plan or maybe the cash balance variant, are those really options for today’s corporate enterprises, even small, large, even the mega corporations? I mean, is that really realistic or is the defined contribution system plus Social Security, plus your personal savings and anything else you’ve gathered over the last 40 years, is that really the future?<\/p>\n
Chantel Sheaks, U.S. Chamber of Commerce<\/p>\n
I think the cash balance, we’ve seen some people moving over toward the cash balance, because really, there’s a really, it’s not even an elephant in the room. We all know it’s there. It’s PBTC premiums.<\/p>\n
We have an organization that they did, I think 500 different simulations, and they’re never going to go bankrupt. Yet I have my plan sponsors who are paying $500 million in premiums when their plan is 140% funded. There’s a disconnect there.<\/p>\n
And the big disconnect is on Capitol Hill because they’re on budget, and because they’re on budget, if we want to change anything, we have to find something to pay for that, even though it’s a fake on budget because everything goes directly to PBTC and doesn’t actually go to the budget. So that being aside, I think part of the problem is just what workforce wants and needs. That I think for some, workforce’s defined benefit plan could make sense, but for others, it just doesn’t.<\/p>\n
I use myself as an example. If I had only had a defined benefit plan, I would only have a coverage from two of my seven employers that I’ve had, because I wouldn’t have stayed longer. I wouldn’t have stayed long enough to actually get a benefit.<\/p>\n
So when you have a more mobile workforce, and you have five-year vesting, or even if it’s only three-year vesting, you’ve decided you’re gonna be more generous than the regulations require, you’re not gonna accrue that much of a pension to be able to make that pension worthwhile. So I do think that there is that kind of a disconnect between the modern workforce and the way some of the older plans worked.<\/p>\n
Jeffrey Snyder, Broadcast Retirement Network<\/p>\n
Yeah, and we’re actually seeing that in, I think in the government sector, when you look at government, people aren’t sticking around for 20, 30 years like they did. Maybe police and firefighters, but not traditional government workers are not. I’ve got about a minute and a half left.<\/p>\n
Let me ask you about, because we talked about, I think the main issue is talking about fixing social security, the systems working, universal coverage, and maybe changing the tone and tenor of the conversation. You’re on Capitol Hill. You actually talk to a lot of plan sponsors.<\/p>\n
How do we begin kind of reframing this to say, people can save if they had the discretionary income?<\/p>\n
Chantel Sheaks, U.S. Chamber of Commerce<\/p>\n
I think the way that we also need to do it with plan sponsors, especially in the small employer world, we need to make it easy. It seems like almost every time we make a change, we make it more complicated, more difficult. And the name of protecting the participant and the name of protecting the employer, it’s more and more difficult.<\/p>\n
I can transfer money like that using my WISE account. Why aren’t we making it? And I do think we’re making strides.<\/p>\n
We’ve got a lot of great technology companies that I’m working with who have made it so that a small employer can spend 10 minutes and that’s all they have to do to set up a plan. And that’s what we need to work toward. And we need to work toward having the employers who can do it, make it easy for them and that they have the workforce that it makes sense for them to do it for their workforce.<\/p>\n
Because if their workforce is just struggling to pay for the bills, to pay for their healthcare, this may not be where it makes sense for them to be spending their time and money. And also recognizing people will get there. It’s like we talked about earlier, it’s cyclical, both with employers and with employees.<\/p>\n
I’m not making the amount of money that I made 30 years ago when I first became a lawyer. Hopefully people go up in the world, just like companies go up, companies mature. And as time goes on, then they will be able to really get that next level of benefit that’s right really for their employees.<\/p>\n
Jeffrey Snyder, Broadcast Retirement Network<\/p>\n
Yeah, very well said. Well, Chantel, we’re gonna have to leave there. I could talk to you for hours.<\/p>\n
I know, I think we’re common in that we’re both retirement nerds. If I do say that about myself, I think you probably feel that the same way. Great to see you.<\/p>\n
Chantel Sheaks, U.S. Chamber of Commerce<\/p>\n
I wear it with a badge.<\/p>\n
Jeffrey Snyder, Broadcast Retirement Network<\/p>\n
I would wear it with a badge too. I think there are a lot of retirement nerds out there, but look, we thank you so much for joining us. And we would look forward to having you back on the program again very soon.<\/p>\n
Chantel Sheaks, U.S. Chamber of Commerce<\/p>\n
Thank you, really appreciate it.<\/p>\n
#Retirement #Reality #Check #Social #Security #Employers #Savings #Gap<\/p>\n","protected":false},"excerpt":{"rendered":"
Chantel Sheaks, VP for Retirement Policy at the U.S. Chamber of Commerce, breaks down the…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[259],"tags":[4530,2118,3548,4491,208,109,582,809],"_links":{"self":[{"href":"https:\/\/stock999.top\/index.php?rest_route=\/wp\/v2\/posts\/6297"}],"collection":[{"href":"https:\/\/stock999.top\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/stock999.top\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/stock999.top\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/stock999.top\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=6297"}],"version-history":[{"count":0,"href":"https:\/\/stock999.top\/index.php?rest_route=\/wp\/v2\/posts\/6297\/revisions"}],"wp:attachment":[{"href":"https:\/\/stock999.top\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=6297"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/stock999.top\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=6297"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/stock999.top\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=6297"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}