Workplace Retirement Plans-Benefit Professionals Must Question The Status Quo

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The U.S. federal government administers two of the largest retirement plans in the country, Social Security (SS) and the Thrift Savings Plan (TSP). Social Security is available to all eligible workers and the TSP is available to federal workers and those in the uniformed services. Social Security is similar to a non-government defined benefit pension plan. Eligibility is based on years worked and wages earned, and benefits last a lifetime. The TSP plan is similar to 401(k)-style retirement plans where the employee contributes part of their pay to the plan and chooses a fund or funds to contribute to, and benefits are not guaranteed.

Given the federal government’s experience with large, complex retirement plans and the significant benefits they provide, benefit professionals may want to listen when the government suggests changes in this area. And it is not just the federal government proposing changes to workplace retirement plans, at least ten states are looking to expand access to a retirement savings account to workers without one. Unfortunately, these proposals rarely receive support or endorsement by benefit professionals.

This is odd. Benefit professionals are dedicated to helping employees minimize financial risk through insurance and savings accounts. So why are they not in support of efforts to expand access to these products?

Reasons Benefit Professionals Do Not Support Changes to Workplace Retirement Plans

  • They take their cues from the financial services sector that does not support initiatives that are small and not a big revenue stream
  • They work for the people (CEOs and CFOs) who are the least interested in changing the status quo
  • They believe the people they work for will not sponsor plans that do not benefit higher paid workers
  • They are afraid of the “extra work” that these changes may cause
  • They believe the current system works for all workers
  • They don’t like government
  • They are reluctant to have a conversation about income inequality
  • They believe that some workers deserve more and some deserve less


Right or wrong the financial services sector feasts off the current workplace system of saving for retirement. They collect hundreds of millions of dollars in fees offering pretty much the same products and services for the last 30 years. They will defend the current system to the death and attack anyone who suggests changes to the system. They may be able to sustain this system for many years to come with intense lobbying efforts, but benefit professionals should not blindly support them. Workplace retirement savings accounts are not easy money for the financial services industry. Benefit professionals must remember their role as supporters of all workers’ financial security. And if that means changes or additions to what is already available, they need to review these new options with equilibrium.
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