TIAA-CREF CEO Roger Ferguson Outlines
Measures to Improve Retirement Security
February 03, 2010 09:56 AM Eastern Time
NEW YORK--(EON: Enhanced Online News)--TIAA-CREF chief executive Roger W. Ferguson, Jr. called for “a
holistic system to ensure Americans can enjoy adequate and secure retirement income” in a speech yesterday to the
National Institute on Retirement Security’s “Raising the Bar” conference in Washington, D.C.
“What we’re really after is retirement security, and how to achieve it in a sustainable way,” said Mr. Ferguson. “A
holistic retirement system would combine the best practices of defined benefit and defined contribution plans.”
TIAA-CREF is America’s largest private retirement system and manages retirement savings on behalf of 3.6 million
Americans in the academic, research, medical and cultural fields.
As envisioned by Mr. Ferguson, a holistic retirement system would:
l Ensure full participation and sufficient funding. Employees would be enrolled automatically on their first day of
work. The system would provide incentives for employers and employees that encourage total contributions
between 10% and 14% to help retirees replace 70% of their pre-retirement income.
l Help employees manage risk by offering a menu of 15 to 20 investment options to provide sufficient
diversification without presenting an overwhelming number of choices.
l Give workers financial education and objective, non-commissioned advice to help them build a portfolio that
reflects their goals and risk-tolerances.
l Provide opportunities and incentives to save for retirement medical expenses.
l Provide lifetime income, via a series of monthly payments that continues for the life of the retiree and, if
applicable, a surviving spouse, partner or dependent.1
“The holistic system I’ve described is designed to help people through 30 years of retirement, not just 30 years of
work,” Mr. Ferguson said.
Mr. Ferguson cited research from McKinsey & Company, which finds that the average American family currently
faces a savings gap of $250,000 at the time of retirement.2
He also reviewed some policy questions that underpin a holistic retirement system. They include assuring savings
adequacy, assessing retirement plans based on how effectively they encourage long-term saving, distributing risks
equitably between employers and employees, and ensuring that federal tax subsidies for retirement enable workers
to achieve lifetime financial security.
On the question of affordability, Mr. Ferguson observed that the federal government’s commitment to retirement
security exceeds $1.2 trillion, as measured by tax subsidies for 401(k)s and other retirement accounts, and
government spending on Social Security and Medicare.3 “Public policy must ensure that existing retirement tax
subsidies are enabling workers to achieve lifetime financial security,” said Mr. Ferguson. “For $1.2 trillion in
subsidies, we can see to it that the average American family won’t be $250,000 short of what they’ll need in
TIAA-CREF (www.tiaa-cref.org) is a national financial services organization with more than $402 billion in
combined assets under management (9/30/09) and the leading provider of retirement services in the academic,
research, medical and cultural fields.
TIAA-CREF Individual & Institutional Services, LLC and Teachers Personal Investors Services, Inc., members
FINRA, distribute securities products.
© 2010 Teachers Insurance and Annuity Association - College Retirement Equities Fund (TIAA-CREF), New
York, NY 10017
Lifetime income is a guarantee subject to the claims paying ability of the issuing insurance company.
2 “Restoring Americans’ Financial Security: A Shared Responsibility,’ McKinsey & Company, October 19, 2009.
2009 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal
Disability Insurance Trust Funds. May 12, 2009.
Chad Peterson, 704-988-6811