Prudential’s Vishal Jain testifies to Subcommittee on Primary Health and Retirement Security, pushing for laws that make it easier for Americans to save.
Vishal Jain, financial wellness officer for Prudential’s Workplace Solutions Group, told U.S. senators that legislation making it easier for Americans to save for retirement would go a long way to helping them ease mounting financial burdens.
On August 21, Jain testified before a U.S. Senate subcommittee tasked with improving Americans’ financial literacy amid a growing national retirement crisis. His testimony comes as Prudential continues to engage with policymakers to ensure everyone can access the products and services they need to enhance their financial security.
“It should come as no surprise that, with the evolution of retirement and health care benefit offerings, today’s workers are having to assume increased responsibility for their financial security,” Jain told the U.S. Senate Subcommittee on Primary Health and Retirement Security during his Capitol Hill testimony. “When coupled with day-to-day financial obligations, such as mortgages and student loan debt, it is easy to understand why employees may be experiencing higher levels of stress about their financial situation.”
Also testifying at the hearing were U.S. Treasurer Jovita Carranza, Lynn Dudley, senior vice president, American Benefits Council, and Scott Astrada, federal advocacy director, Center for Responsible Lending.
“Financial literacy, just like standard literacy, is fundamental to successfully navigating our world, and yet we appear to be failing in our efforts to expand this knowledge,” Sen. Michael Enzi (R-WY), hearing chairman said in opening remarks.
“I do believe we are facing a retirement crisis. I don’t say that just to be an alarmist,” added Sen. Doug Jones (D-AL), the hearing co-chair. “But I do believe it’s important to place the proper emphasis on the challenges we’re facing.”
Below are a few key excerpts from Jain’s testimony:
1. “Legislation that further encourages and facilitates the use of auto-enrollment and auto-escalation provisions can enhance both retirement plan participation and savings rates. And provisions that remove impediments to the inclusion of guaranteed lifetime income solutions as part of a retirement plan can better ensure employees have access to the products they need to effectively manage investment and longevity risks during their retirement years.”
2. “We believe the worksite can have a significant role in helping individuals improve financial wellness for two key reasons. First, many individuals’ financial lives are centered at the worksite through the retirement, health care, and protection benefits that they access at work. Second, the worksite provides an opportunity to engage employees through a wide range of channels and around important life milestones, such as marriage or the birth of a child.”
3. “Prudential started measuring the financial stress of its employees about 10 years ago. Prudential’s financial wellness program has significantly improved reported levels of stress among employees. The percentage of Prudential’s employees reporting financial stress has been cut in half—from a high of 34 percent in 2009 to 17 percent in 2018. This improvement also impacts health care costs, disability costs and productivity, based on the historical correlations that we have measured between financial stress and these factors.”
4. “We are seeing an increasing number of employers begin to focus on financial wellness, both to help employees and to address key employer outcomes such as productivity and workforce engagement. In a recent survey of financial executives, 82 percent agreed that their companies would benefit from having a workforce that is financially secure, and 78 percent felt that employers should assist in achieving financial wellness during working years.”
5. “We would be remiss if we did not acknowledge that, while workplace-based retirement plans—a critical component to overall financial wellness—are helping tens of millions of working Americans, tens of millions more of today’s workers do not have access to retirement savings plans in the workplace. This gap in retirement plan coverage is particularly problematic for workers employed by small employers and “gig economy” workers. Multiple employer plans, in our view, offer a promising means of narrowing the retirement coverage gap.”