Bill Overview
Title: Savvy Saver Act
Description: This bill requires the Department of Labor and other agencies to study and report on the disclosure requirements for participant-directed retirement accounts, including ways to improve participants' understanding of the fees and expenses related to defined contribution plans.
Sponsors: Sen. Lujan, Ben Ray [D-NM]
Target Audience
Population: People with participant-directed retirement accounts
Estimated Size: 80000000
- Defined contribution plans are a major retirement savings vehicle in the US and other parts of the world.
- Individuals who are participants in these retirement plans are directly affected by changes in how fee disclosures are handled, as this affects their understanding and management of retirement savings.
- The U.S. has one of the largest numbers of defined contribution plan participants due to the widespread use of 401(k) plans.
Reasoning
- The Savvy Saver Act targets individuals with participant-directed retirement accounts, particularly those with 401(k), 403(b), and 457 plans. Given the budgetary constraints, the policy will not immediately revamp financial advice services but will focus on improving information clarity around fees.
- The Cantril wellbeing scale allows us to simulate the subjective wellbeing impacts, particularly how financial understanding and savings might influence perceived life satisfaction.
- Considering there's a large population of 80 million potential beneficiaries (defined contribution account holders in the US), the policy focuses on enhancing comprehension of retirement finance, potentially boosting confidence but limited by the scope and tiered rollout.
Simulated Interviews
HR Specialist (New York, NY)
Age: 30 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 15/20
Statement of Opinion:
- I think clearer fee disclosures could help me make better decisions, perhaps increasing savings.
- I often find plan statements confusing. Enhancements are welcome.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 8 | 7 |
| Year 10 | 7 | 6 |
| Year 20 | 6 | 5 |
Software Developer (Austin, TX)
Age: 45 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 3.0 years
Commonness: 18/20
Statement of Opinion:
- I'd appreciate any additional clarity on fees. This could save me significant amounts over time.
- Fee transparency in retirement accounts seems overdue.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 8 | 8 |
| Year 10 | 8 | 7 |
| Year 20 | 8 | 6 |
Retired Teacher (Phoenix, AZ)
Age: 62 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 10/20
Statement of Opinion:
- I hope this helps simplify the paperwork and maybe cut costs.
- Understanding fees might stretch my savings further.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 5 |
| Year 10 | 6 | 5 |
| Year 20 | 5 | 4 |
Construction Manager (Denver, CO)
Age: 51 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 6.0 years
Commonness: 12/20
Statement of Opinion:
- I'm constantly concerned about hidden fees eating away at my retirement.
- Simpler fee information is a good move.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 8 | 7 |
| Year 10 | 7 | 6 |
| Year 20 | 6 | 5 |
Marketing Associate (San Jose, CA)
Age: 24 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 10.0 years
Commonness: 13/20
Statement of Opinion:
- Understanding my retirement plan fees better could help me build a stronger financial future.
- Right now, I don't pay enough attention to my retirement details.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 7 | 5 |
| Year 3 | 8 | 6 |
| Year 5 | 8 | 6 |
| Year 10 | 8 | 7 |
| Year 20 | 8 | 6 |
Small Business Owner (Miami, FL)
Age: 39 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 12/20
Statement of Opinion:
- Fewer fees could benefit my business and retirement plans.
- Clarity is always a step in the right direction.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 6 | 6 |
| Year 10 | 6 | 5 |
| Year 20 | 5 | 5 |
Nurse (Seattle, WA)
Age: 57 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 6.0 years
Commonness: 11/20
Statement of Opinion:
- Even a little more information can provide peace of mind as I head towards retirement.
- I hope this can help me avoid unexpected fees after retiring.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 7 | 6 |
| Year 10 | 6 | 5 |
| Year 20 | 6 | 5 |
Financial Analyst (Chicago, IL)
Age: 28 | Gender: male
Wellbeing Before Policy: 9
Duration of Impact: 3.0 years
Commonness: 8/20
Statement of Opinion:
- Enhanced disclosure won't change much for me, since I'm already quite informed.
- It might be useful for my clients who need more guidance.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 9 | 9 |
| Year 2 | 9 | 9 |
| Year 3 | 9 | 9 |
| Year 5 | 9 | 9 |
| Year 10 | 9 | 9 |
| Year 20 | 9 | 8 |
Public School Teacher (Boston, MA)
Age: 34 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 14/20
Statement of Opinion:
- Educational resources from this act could empower me to make better financial decisions.
- I regularly worry about my retirement plans' fees.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 6 | 5 |
| Year 20 | 6 | 5 |
Retired Engineer (Orlando, FL)
Age: 70 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 16/20
Statement of Opinion:
- I like the idea of clear fee disclosures but at my stage, it might be a bit late.
- Still, better late than never, and it would help in case I need to adjust.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 6 |
| Year 5 | 6 | 6 |
| Year 10 | 6 | 5 |
| Year 20 | 5 | 4 |
Cost Estimates
Year 1: $50000000 (Low: $30000000, High: $70000000)
Year 2: $30000000 (Low: $20000000, High: $50000000)
Year 3: $30000000 (Low: $20000000, High: $50000000)
Year 5: $30000000 (Low: $20000000, High: $50000000)
Year 10: $0 (Low: $0, High: $0)
Year 100: $0 (Low: $0, High: $0)
Key Considerations
- The policy primarily involves regulatory study and dissemination without immediate hardware or infrastructure investment, limiting high upfront costs.
- Potential educational benefits for participants may encourage more informed decisions, possibly impacting retirement savings trends and behaviors over time.
- The flexibility in study execution allows for cost optimizations through different methodologies of data gathering such as online surveys or workshops.