A wide range of policy debates have a direct influence on the products, services, and solutions our customers rely on to prepare for every stage of their lives. To support efforts that encourage better retirement policies, Fidelity shares with policymakers the collective experience of a significant segment of workers planning for retirement.
The U.S. Congress made it easier for all workers to save for retirement when they passed the Pension Protection Act of 2006 (PPA), which gave employers a basic recipe for a defined contribution (DC) plan. How do we know that PPA worked? Our customer data proves it, drawing on behaviors of more than 23 million individual investors and 20,000 employers. With a focus on behavioral economics, PPA relies on setting defaults for savers and has initial results of higher savings rates and improved asset allocation.
With more and more employees relying on their DC savings as their primary source of retirement income, however, Fidelity is working to advance policy that will build on the existing improvements that PPA has made to saving for retirement. We know that more plan sponsors would benefit from more aggressive strategies for plan design to promote higher participation and savings rates. Fidelity will continue to advocate for policies that help make it easier for employers to adopt a plan design that can improve outcomes for all workers.