Balancing pace of new rules, renewed emphasis on long-term saving focus of National Summit on Retirement Savings

<p>WASHINGTON – While credit unions can expect to implement “more paperwork” with the myriad of changes expected to pension and retirement plans, growth opportunities still abound, said CUNA President Dan Mica after attending the National Summit on Retirement Savings. This year’s three-day summit, the second in a series mandated by the 1997 passage of the Savings are Vital to Everyone’s Retirement Act, focused on `saving for a lifetime: advancing generational prosperity.’ “The message was unmistakable – laws and rules affecting retirement programs will be tightened,” Mica said. “There are different ideas of how to get the job done, but all sides indicated something must be done quickly.” Mica also said CUNA will keep credit unions updated on relevant changes, which will ultimately affect employees and credit unions, members. The first Savers summit took place in 1998, and the third is scheduled for 2005. More than 250 delegates from various industries attended the summit including NAFCU President Fred Becker. Pres. George W. Bush and Federal Reserve Chairman Alan Greenspan also emphasized the need for renewed savings given the shift away from reliance on Social Security to personal retirement income. That message couldn’t be more timely because for Americans born today, the average life expectancy is age 77 and rising, said Labor Secretary Elaine Chao. “That’s more than a decade longer than babies of their grandparents’ generation were expected to live,” Chao said. “People once worked a lifetime for one employer but today’s 32-year-olds already have worked for an average of nine different companies.” She added that more “innovation in the financial world has generated new investment vehicles, such as mutual funds and defined contribution plans, or 401(k)s.” Challenges include getting out the message to Americans about the importance of retirement savings, even in the world of a cluttered, media-oriented information age. The message must be crafted for different generations and Americans must have access to good advice, she read from her remarks. “The fact is, most people simply don’t have the time or inclination to become experts in managing financial portfolios, even their own,” Chao said. “They have jobs to do, children to take care of, and bills to pay. Especially in less certain economic times, people need help to chart their retirement strategies.” Indeed, according to a survey by the American Savings Education Council (ASEC) and the Employee Benefit Research Institute released at the summit, half of those surveyed have saved less than $50,000, and 15% say they’ve saved nothing for retirement. Even among Americans closest to retirement, those ages 40 to 59, just a quarter have saved $100,000 or more. More than 42 million participated in 401(k) plans at the end of 2000, with an average individual balance of $41,900. -</p> <p>[email protected]</p>