Fredrik Axsater & Brigitte Madrian: Pension solutions

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Fredrik Axsater of State Street Global Advisors and Brigitte Madrian of Harvard discuss workable solutions for creating retirement plans for all Americans.

Fredrik Axsater & Brigitte Madrian: Pension solutions

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There is a retirement crisis in this country that is escalating as an estimated 10,000,000 baby boomers turn 65 every day. Two thirds or 40 million of the approximately 76 million boomers are already 65 years or older … and social security, which is almost two years old. One-third of boomers say bankruptcy is the main source of retirement income. Unless changes are made to social security to increase funding and tighten eligibility, the program is expected to spend more than it deserves by the end of this decade and to be fully used by 2034. It’s not just baby boomers that are in trouble. With the decline of traditional retirement plans and their longer lifespan, younger Americans also face enormous savings and deficits in retirement plans unless their savings and investment habits change. It is time to address the crisis. 2016 marks the tenth anniversary of the Pension Protection Act (PPA), which was primarily intended to prop up financially troubled defined benefit plans and their insurers. However, legislation has also significantly improved the health of defined contribution plans, including 401 (k), which are now the dominant individual retirement vehicle for those Americans offered such plans at work, mainly in large corporations. There is a large access gap for small business employees who have long been the main drivers of job creation and employment. Almost 40% of working households do not have access to employer-related plans. And the vast majority of part-time and contract workers are excluded entirely. There is growing momentum from the private and public sectors to change this and provide much better access to retirement plans that work for employers and employees alike. This week’s guests are at the forefront of this effort. We will be accompanied by Brigitte Madrian, Professor of Public Order and Corporate Governance at Harvard Kennedy School of Government. Since 2014, she has also been one of the 19 members of the Pension and Personal Savings Commission set up by the Bipartisan Policy Center. The Commission of Economic, Political and Political Leaders recently issued its recommendations on reforming social security, increasing access to occupational pension plans and promoting savings.


We’ll also hear from Fredrik Axsater, Global Head of Defined Contribution at State Street Global Advisors, who oversees more than $ 2 trillion in actively managed and passive assets worldwide. Global defined contribution plans account for approximately $ 300 billion of this. SSGA is the investment management arm of State Street Corporation. Axsater, who joined SSGA in 2011, has focused his career towards retiring employers and employees around the world. SSGA CEO Ron O’Hanley recently wrote an open letter to Congress calling for mandatory retirement plans for all private sector employees. I asked both guests why they believe that focusing on the workplace is key to solving the retirement crisis and why they are both optimistic that the expansion of 401k access will take place nationally. If you miss the show this week, you can always check it out on our website. We also have an EXTRA interview with Madrian and Axsater that is exclusively available online. As always, we look forward to your feedback on Facebook, Twitter or via the Contact Us link on our website. We read all of your comments. Thank you for watching. I wish you a nice weekend and make the coming week profitable and productive.

Have a savings account separate from your retirement account

Axsater: Simple solution for retirement

Invest in a fund as of the cut-off date

  • Automatically rebalancing becomes more conservative over time

Madrian: Stop hesitating

Save for retirement today

  • Sign up for the employer plan, if available
  • Otherwise contribute to an IRA

Savings psychology

Brigitte Madrian, who holds a doctorate in economics, recognized early on that understanding the psychology of saving would lead to better results.

Pension solutions

State Street Global Advisor’s Fredrik Axsater has spent most of his career finding solutions to the financial challenges of retirement. It’s a commitment that started with an innovation for retirement.


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