(Bloomberg) -- Putnam Investments Chief Executive Officer Robert Reynolds plans to urge regulators and investment professionals today to expand workplace retirement plans and make them safer.
Reynolds, in the text of a speech set to be delivered in Washington, proposes mandatory 401(k) enrollment for workers whose employers offer the plan and bigger tax breaks for companies that match contributions. He will speak at an event organized by 401kWire.com, a retirement industry Web site.
The average retirement-account balance sank 30 percent to $58,000 in the two years ended Dec. 31, according to Hewitt Associates Inc., a Lincolnshire, Illinois-based benefits- consulting firm. Investors had $2.7 trillion in 401(k) accounts as of Sept. 30, according to the Washington-based Investment Company Institute, a trade group representing mutual funds.
“The multitrillion-dollar wave of wealth destruction that struck America’s markets in 2008 inflicted serious losses for retirement savings,” Reynolds said. “We need to act now to reboot the system and boost retirement savings.”
In February, Representative George Miller, a California Democrat and chairman of the House Education and Labor Committee, called 401(k)s “little more than a high-stakes crapshoot.”
A law passed in 2006 allowed 401(k) providers to automatically enroll new workers, forcing them to opt out if they desired. For the 30 percent of plans that switched from voluntary enrollment, participation rose to about 90 percent of employees from 60 percent, according to Boston-based Putnam.
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