House Education and Labor Committee Chairman
George Miller (D-Calif.) declared the present 401(k) system “paralyzed” by the financial crisis Oct. 22 at The Impact of the Financial Crisis on Workers Retirement Security, a hearing held by his committee in San Francisco.
A complete 401(k) redesign is a “very, very high priority” right now in an effort to deliver retirement security to workers and make sure there is more efficient use of the $80 billion in annual subsidies spent on it, Miller said at the hearing.
“This has to be repaired,” he said. “There is a great deal of urgency because people are paralyzed and they are not making contributions or opening 401(k) plans, rather they are taking money out.”
Miller would only commit himself to “a wholesale re-examination” in his comments Wednesday. At the close of the hearing he said lawmakers would have to examine all of the alternatives, including one that would simply convert the existing incentives into a government match for savings by poor workers.
Most of the questions asked during the hearing assumed the continuation of an employer-based system, but with many changes. As it is now, said Miller, “it is in pretty sad shape” to act as the main private sector retirement saving vehicle.