PUTNAM INVESTMENTS CEO ROBERT L. REYNOLDS SAYS RETIREMENT SECURITY IS A 'VITAL NATIONAL CHALLENGE'
Calls on President Obama and Governor Romney to Endorse Existing Savings Incentives and Debate How the Nation Can Move Swiftly to Make Social Security Solvent
BOSTON, May 9, 2012 — Putnam Investments Chief Executive Officer Robert L. Reynolds today called on President Obama, Governor Romney and both political parties to recognize retirement security as "not only a vital national challenge, but a key element in solving our nation's debt and deficit crisis over the long term."
Speaking at a retirement security forum in Washington, D.C., sponsored by the Financial Services Roundtable, Reynolds said that, “Both political parties should come together to create a truly reliable retirement system with strong public and private elements. We have the ability to make Social Security solvent and extend access to retirement savings on the job to all working Americans. We have a great foundation to build on – and it would be tragic if we fail to get this done.”
Noting recent data showing an uptick in elderly poverty and growing strains on Social Security‘s finances, Reynolds called for retirement security to be a front–and–center issue in this year's presidential campaign. "This year is the time for debate. Next year is the time for action. A secure retirement system can provide higher savings, fuel more investment and sustain more rapid economic growth. But we need to strengthen the system, not undermine it — as some short–sighted budget hawks in Washington are proposing to do.”
Reynolds explained that retirement savings tax incentives are merely a deferral plan designed to encourage broad–based savings and ultimately the lessoning of longer–term financial burden on the government; not tax “expenditures,” as some in the budget discussions have portrayed them.
Underpinnings of Retirement Savings at Risk
Citing recent deficit commissions and Congressional policy papers that repeatedly identify savings incentives as a major cost to the Treasury, Reynolds warned that cutting back such incentives could send millions more working Americans toward retirement with little or no retirement savings. “It is hard to imagine a more perverse and destructive policy error than undercutting private savings to try to cope with out–of–control federal deficits,” Reynolds continued. “National solvency and personal solvency go together. We should never pit one against the other as proposals to cut retirement savings incentives would do.”
Presidential Candidates Put on Notice
Indicating that 10,000 Baby Boomers will be reaching retirement age every day for a generation to come and the number of Americans over age 65 is due to rise from 32 million today to over 70 million by 2030, Reynolds said, “Retirement security is too critical an issue to be dealt with in closed committee rooms or in think–tank debates in Washington. Americans need a full, open national discussion about policy risks to savings incentives — including how close we are to actually solving the retirement challenge, as well as the real dangers that await if we are not up to the task.”
More positively, Reynolds contended, “We also need to convince people that retirement savings policy can play a key role in lifting Americans' savings rates and financing economic growth. The American people need to know that we can solve this challenge. There are serious, bipartisan compromises that could make Social Security solvent now. Delay would only make reform more painful. At the same time, we can extend private retirement savings options to all working Americans. Together, this public–private system can deliver reliable lifetime incomes. We know how to do that –– and we should. ”
Restoring Faith in America’s Ability
About Robert L. Reynolds
Reynolds has been a leading advocate of addressing the nation’s long–term financial problems through a comprehensive and integrated approach that includes retirement savings, entitlement reform and addressing the structural deficit in the federal budget. Prior to joining Putnam, Reynolds spent 23 years at Fidelity Investments, where his accomplishments included building the firm’s retirement business.
About Putnam Investments
Putnam mutual funds are distributed by Putnam Retail Management.
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