Solution

A proven, ready-made solution to build wealth for working Americans.

We are calling on Congress to give low- and moderate-income Americans access to a new retirement savings program modeled after the federal Thrift Savings Plan (TSP), a 401(k)-like program enjoyed by federal employees. Key features of TSP include automatic enrollment for eligible workers, low fees, simple plan options, and federal matching contributions to reward and encourage savings.

Research shows that the right incentives can play a crucial role in helping people achieve their financial goals and attain self-sufficiency. The TSP is a proven program that draws from important findings in behavioral economics to deliver outstanding results for eligible workers–including those with low income and educational attainment.

That’s why it is a perfect model for a new program designed to target lower-income workers who don’t have access to a retirement plan through their employers, thereby filling the gap in the current retirement system that is leaving tens of millions of American workers behind.

Helping hardworking Americans build wealth shouldn’t be a partisan issue. As the country begins to rebuild from the Covid-19 crisis, it’s time for Congress to work together to ensure that everyone has access to a retirement savings account like the TSP.

What They Are Saying

“Imagine how healthy and secure our collective future might look if we could diminish wealth disparities. The persistent lack of wealth at the bottom undermines faith in the basic fairness of our economic system and prevents millions of Americans from enjoying a direct stake in national growth and prosperity.”

Kevin Hassett
Vice President & Managing Director
The Lindsey Group, and Former Chair of the White House Council of Economic Advisors

“The pandemic and recession shattered open already growing gaps in economic opportunity. As the country rebuilds, we need new ideas to build wealth and financial security for American working families. Our bold design for expanding retirement plans is one key step.”

Teresa Ghilarducci
Professor
The New School

“This paper marks the start of an exciting new project helping to ensure that every American worker truly has a chance to build wealth, enjoy a secure retirement, and grow a nest egg for future generations. We look forward to working with partners in Congress to develop Professor Ghilarducci and Dr. Hassett’s transformative concept into bipartisan legislation in the weeks ahead.”

John Lettieri
President & CEO
Economic Innovation Group

“In 2019, the Federal Reserve found that for the bottom 50 percent of American families–that is half of the country–the median retirement account savings balance is $0. So, what if there is an elegant solution to this massive problem, and what if that solution already exists? Today we are going to explore the retirement gap, and a possible fix that could be staring us right in the face.”

Meghna Chakrabarti
NPR
The Stats
Fig. 03
0
Percentage Point Jump

TSP participation rates jumped by at least 20 percentage points with a government match for: eligible Black workers, those with at most a high school education, and those in the bottom one-third of earnings (according to a Congressional Budget Office ↗ report).

Fig. 04
Automatic enrollment participation rates reach
0%
for Black Federal Employees
0
for those in the bottom one-third of earnings.