Thank you. It is really helpful for us to spend some time at this meeting talking about long-term savings and investing. We all know these are key building blocks for planning and securing our futures. Today I want to highlight some of the ways the Consumer Bureau and our colleagues on the Commission are working with our employees and with the public to promote financial security through smart savings practices.
More than ever, employers are playing a key role in providing resources for employees to encourage savings and investing. Often employees will make important decisions about insurance plans, retirement savings, and other specialized accounts, even on their first day on the job. When employees decide whether and how to enroll in these programs, they are taking early and crucial steps on the path to securing their retirements.
Last year, the Bureau published a report titled “Financial Wellness at Work.” The report outlined some of the initiatives that forward-thinking companies have undertaken to promote financial wellness. These companies are leveraging technology, workplace relationships, and other promising practices to find low-cost, high-impact ways to promote financial wellness at work. One-on-one counseling, financial management courses, and interactive activities are empowering their employees to plan for immediate needs while at the same time considering their long-term financial goals.
The U.S. Army is a great example, as described in the report, of an organization that is actively promoting financial wellness within its ranks. A recent study of over 80,000 participants in the Army’s financial wellness training program found positive results from these efforts, with the strongest impact on retirement savings. Under the program, the average amount contributed to servicemember retirement accounts each month roughly doubled, from around $15 per month to over $30 per month.
During previous FLEC meetings, we have explored the benefits of workplace financial education in supporting long-term savings for employees. At the Bureau, we are working to encourage our employees to save for the long term through a monthly outreach initiative that covers not only retirement saving, but also topics such as improving credit scores and financing a child’s education.
We also launched a program offering seminars and in-person, one-on-one financial planning sessions about retirement, tax planning, and protection against identity theft. These efforts have already produced tangible results with over a thousand of our employees who have taken advantage of these services this year alone. We have also seen increases in employees maximizing their match through their available thrift savings plans.
Through this Commission we have also learned together how important it is for employees to start saving early in their careers. This idea is foundational in the work of the FLEC Committee on Starting Early for Financial Stability and Long-Term Savings & Investing, led by the Department of Labor and the Consumer Bureau. The Committee is encouraging federal employees to save through their available savings or retirement programs early and consistently. Many of these concepts are included in the financial literacy plans that have been submitted by 20 FLEC agencies.
But we also want to make sure that all consumers, not just federal employees, are thinking about long-term savings. Last week, at a joint event with the Social Security Administration, we released a new interactive tool to help consumers consider and decide when is the best time for them to start claiming their Social Security retirement benefits. This tool, known as “Planning for Retirement,” is the newest addition to the set of tools that the Consumer Bureau is developing to help consumers make sound financial decisions throughout their lives.
For the millions of Americans who do not have access to employer-sponsored retirement plans, we are all pleased to celebrate the great work being done by the Department of Treasury, which has recently launched myRA, or my Retirement Account, which is designed for ease of use and individual flexibility. Notably, myRA is a savings vehicle that is free to open, has no fees, guarantees the principal, offers a premium interest rate, and allows account holders to decide how much they can afford to contribute. It provides a simple, safe, and affordable path to saving for retirement for working Americans. I am looking forward to learning more about myRA during today’s discussion, and I urge each of us to find ways to promote it far and wide.
In today’s workplace, millions of Americans are employed as temporary, contract, intermittent, seasonal, or part-time workers. Because they are not full-time, full-salary employees, they may not have access to any employer retirement program (even if others in the same workforce do). These workers will now be able to use myRA as a vehicle to get ahead on their finances by saving for emergencies or for retirement. Many people who live paycheck to paycheck do not feel like they have any extra money to start saving for retirement. But with the right mechanism available to them, that may no longer be true. And many Americans can open a myRA to take advantage of the tax-time moment by depositing a portion of their refund into this new account, which can help them save for both the short term and the long term.
Before I end, I want to point out that the Consumer Bureau recently released our 2015 Financial Literacy Annual Report, which discusses all of the initiatives I just mentioned as well as our other programs to support financial well-being. This report has been included in your packets and I encourage everyone to visit our webpage at consumerfinance.gov to find out more.
The work we have begun together is a great start, but we all know we can do much more to encourage long-term savings. I look forward to hearing from our distinguished panel today on some of the most innovative practices in the field. Thank you.