DOL Savings Summit Should Target Military Personnel, Low-Income, NAFCU Says

ARLINGTON, Va. – NAFCU is hoping its input for a summit on retirement savings will go a long way in boosting participation. The Department of Labor (DOL) will hold its third National Summit on Retirement Savings in March 2006 and recently asked for suggestions on topics to be included on the agenda. NAFCU President/CEO Fred Becker offered three possible inclusions. In addition to providing financial education in the nation’s schools and low-income areas, Becker suggested adding a consumer education component on the importance of budgeting, saving, and retirement planning and on the responsible use of credit and the effects of bankruptcy. “While these are broad goals, public and private efforts such as the National Summits and the activities of financial institutions, including credit unions, have identified a host of opportunities to educate Americans about the need for retirement savings,” Becker wrote in a July 5 letter to the DOL. Based on credit union experiences, NAFCU would recommend that the 2006 Agenda include consideration of ways to support and improve upon several existing savings initiatives. For example, the success of Individual Development Accounts and Internal Revenue Service split-return accounts warrants further development and expansion, Becker said. NAFCU recommended the expansion of financial literacy programs such as MoneySmart and Banking on Our Future. The 2006 Summit agenda should also include consideration of school-based, student-operated credit unions in schools as mechanisms to educate youth and actually create new student savers, he added. “In addition to being among the first to place an emphasis on financial literacy, today credit unions are also among the finest at offering their members sound financial management advice,” Becker said. “Credit unions nationwide have implemented financial literacy programs at the local and national level.” NAFCU also recommends that the DOL consider the unique financial needs of military service personnel. “Many of these men and women are very young when they begin their military careers and have not had the opportunity to learn the basics of personal finance and saving for retirement,” Becker explained. “Unfortunately, some entities have used this to their advantage, and young military personnel are often a target for certain speculative investment and savings products.” The Summit should include support for financial education initiatives to provide “unbiased financial information and guidance” to the nation’s military men and women, he offered. Becker said NAFCU would be willing to provide the DOL with examples of credit unions that have specific financial education and retirement programs in place and the trade group also hoped to be a participant in next year’s Summit as it had in the previous two meetings. [email protected]