Time to Get Rid of All Those 401(k) Plans

Russell “Rusty” Olson and Douglas Phillips proposed in their just-published paper, Let’s Save Retirement: Repairing America’s Broken System of Funding Workers’ Retirement, the creation of a single private defined-contribution (DC) plan. Their paper, the authors say, offers a basis for near-term action by Congress and the Administration to help resolve the growing problem of funding workers’ retirement. By way of background, Olson, a consultant and author of four books on investing, was for more than 25 years responsible for the investment of Eastman Kodak’s defined benefit pension plan and its 401(k) plan. Phillips, with 32 years of investment experience, has for the last 14 years been chief investment officer for the University of Rochester’s $2 billion endowment fund and serves on the university’s retirement committee (responsible for $3 billion). Olson and Phillips responded to our questions about their paper via email. The entire paper is available online.