Ensuring Social Security.
The U.S. Social Security bubble is set to burst in 2015. Left untouched, the system's benefit payments will out pace contributions and our government will face such unpalatable options as doubling payroll taxes or slashing retiree benefits.
Already today's young workers are making significant contributions into a virtual black hole. Retirees face the prospect of dwindling benefits and an ever-climbing retirement age. Clearly, something must be done.
We are not alone. "Pay-as-you-go retirment systems in every country are heading toward total disaster," says Michael Tanner of the CATO Institute. The success of privatization efforts in countries like Chile, Australia, and Great Britain have reform enthusiasts calling for a similar effort on American shores. But reform comes with its own share of challenges, such as how to en sure that workers invest sensibly and whether government agencies or private firms will manage the resulting billions in retirement accounts.
In the following two roundtables, sponsored by Persumma Financial, a Newton, MA-based provider of 401(k) plans to businesses and a member of the MassMutual Financial Group, business leaders scrutinized the hurdles of privatizating Social Security and the challenges of retirement planning.
Can the U.S. manage radical reform of our 65-year-old retirement system? More to the point, can we afford not to?
Roundtable I: Chile Leads the Way?
Michael Tanner (CATO Institute): There are, essentially, three models for how countries manage their public retirement systems. The first type we have here in the U.S., Western Europe, and Japan. It's called a pay-as-you-go system. When you pay your social security taxes, that money is not put aside for your retirement, but instead used to pay current beneficiaries.
In other words, there is absolutely no money in that Social Security Trust Fund. It consists of government bonds, which are simply a promise against future tax revenues. In every country, those pay-as-you-go systems are heading toward total disaster. In 2015, Social Security in the U.S. will begin to run a deficit. It will pay out more in benefits than it's taking in.
And that means you folks are going to have to pay up in one of two ways. Either Social Security benefits will be substantially reduced, in which case employees are going to be turning to you for more contributions. Or there will be a significant tax increase. We're talking about roughly a 50 percent increase in the current payroll tax in order to pay all the promised benefits. The current payroll tax is 12.5 percent, roughly. Just as an aside, that is the largest single tax that most American families pay. That doesn't include the Medicare portion of the payroll tax. If you actually throw the two of them together, the total payroll tax goes to about 28 percent.
In addition to that, you face other problems in the current system, particularly the fact that it provides such a low rate of return to workers. Younger workers will actually pay more in taxes than they receive in benefits. That's even if Social Security provides all the benefits promised, and there's no tax increase. You end up with most of your employees paying just a pure tax.
This is happening to all the pay-as-you-go systems in Europe, Japan, the United States, and Canada. The result is that most of the world is beginning to make a shift towards a defined contribution, forced savings regime. Chile faced the problem in 1981 and implemented a system under which the payroll tax comes out of the worker's check roughly the same way it does today in the US. Instead of sending that money off to a government-run security system, they send it to an individually owned account very similar to a 401(k) or an IRA. It's managed by the private sector, invested in real assets, bonds, stocks, annuities and so on. What you get back at retirement is based on what you pay in plus the return your investments earn. They've been very fortunate in Chile, over the last 18 years the average real, after-inflation rate of return has been 11.2 percent vs. around 2.2 percent for a worker retiring in the U.S. today. It will be under 1 percent for most future workers.
This has been so successful in Chile that it's been copied in virtually all of Latin America. Australia and Great Britain have moved to privatized systems. Sweden has partially privatized. Eastern Europe, Poland, Hungary, and others have moved to a privatized system. Even in communist China workers in the urban areas can take half of their payroll tax and put it into an individually owned account invested in private assets. So, we've now fallen behind the red Chinese when it comes to retirement.
Clearly, this is going to be a major issue. This is not a debate that your companies can sit out. This is something that's really going to have an impact on the bottom line.
Spencer Williams (Persumma Financial): Does the Chilean system include advice and choice as to where you can put the money?
Tanner: First of all there are limits on the types of investment that are allowed in Chile. Each of the fund managers is allowed to offer a single fund. Beginning this year, actually, they must offer a second fund for people nearing retirement, which is an all-bond fund so people who are, say age 55, can begin to move their money into a secure type of fund.
Other than that they're allowed to opt for a single fund with limits. You cannot, for example, invest more than 40 percent of your money in equities, the rest must be in some sort of fixed bonds or real estate. You cannot invest within your equities more than 10 per cent in a single industry sector, or more than 8 percent in a single industry. We're talking about top grade in vestments.
J.P. Donlon (CE): Is there a finite number of institutions involved?
Tanner: No, there's unlimited entry into the field. And they've merged, people have come in, gone out, there's about eight right now. They've had as high as 21. The reality is the smaller ones tend to get eaten up by the larger ones. There are three American companies--AIG, Aetna, and Citibank--that own a 50-percent share of the fund managers in Chile.
Williams: So the advice is embedded in the structure of the funds that are offered. And with that they've achieved an 11 percent year over year return since they privatized.
Tanner: That's correct. They've only had two years in which they had a negative return. They've had years that have been as high as 30 percent. And in part this has helped smooth out fluctuations in the stock market because you're talking about an enormous in flux of capital. These funds manage roughly the equivalent of 50 percent of GDP. In fact, there's so much capital that they're investing increasingly out side the country.
I should also mention that when employees become stockholders, their attitudes toward their jobs and the economy in general tend to shift. Everybody becomes an investor. You no longer have labor and capital at loggerheads because everybody who is a laborer is a capitalist. That, physiologically, is a major difference in the economy. That has also happened in Chile. Post-privatization strikes declined about 50 percent in Chile.
Jack J. Davis (Ventura Foods): Don't you think, though, that in a society where you have a homogenous cultural background that it's much simpler to get participation and support for that? I look at Chile and it's almost one culture. It would be like Japan. Here in this country we have such a diverse melting pot of cultures. It's much more difficult to sell something like that.
Donlon: Tell about the use of the blue book as a psychological weapon in persuading people...
Tanner: That was interesting. Back in 1981 the Chilean banking system still relied primarily on passbooks. So, workers were given a passbook for their social security account. They set up the equivalent of an ATM. You could put your passbook in the machine, and it would print out the balance in your retirement account and how much your investments earned. So you know exactly at any given time how much retirement money you have, unlike Social Security where no one has any idea how much they're going to be getting in retirement. People feel a sense of wealth accumulation.
Ronald M. DeFeo (Terex): How do we end up in this country calling that a risky scheme? I mean it's incredible.
Dan Robinson (Placid Refining): It seems to me it's going to be riskier if, in a few years, we start asking our young people to pay 28 to 40 percent of their pay into a welfare scheme where they have no ownership. If you give them an ownership stake in it, you're going to have less likelihood of a revolt on your hands.
Tanner: That's a very significant problem. If 15 years down the road Social Security is in deficit, and Washing ton says, "Okay, we're going to hike your payroll tax by 50 percent, and by the way, you're not going to see any of this money in your retirement," you've got an intergenerational war on your hands.
Donlon: So what do you think is going to happen?
Tanner: You're going to see a major political fight over the next year. They'll move forward on this. I think that you have enormous interest groups that will oppose it. The AFL-CIO has budgeted $30 million to oppose Social Security privatization.
Tanner: Part of it's ideological. Part of it is a lack of trust in the private sector and a belief in government. And part of it is the end of class warfare. There are groups in this country that survive by pitting labor against capital and don't want to lose that.
Arnold Pollard (CE): They'd lose a hold on their membership. Right now labor unions get a lot of dependency from their members because they're holding the reigns on retirement. This means they loosen the reigns. That was an issue in Chile, and the way attitudes changed is rather interesting.
Tanner: It came from the bottom up. The labor unions in Chile resisted until their membership demanded the change. In Chile a labor leader reportedly said, "All right, I give up. Last night in bed my wife told me she wants a passbook." The AFL-CIO's own internal polling shows that 60 percent of their workers want at least a partially private Social Security.
Pollard: How do you know that?
Tanner: It was leaked.
DeFeo: We're limiting our view of this if we just think about retirement and Social Security issues. This is about American competitiveness because if 2015 is the reality, we face the precipice of disaster. We're going to have to do something or our competitiveness is going to go to hell. And all of our jobs are going to go other places where the cost of doing business is less.
Donlon: The ones that haven't already gone there anyway.
DeFeo: It's incumbent upon us as business people to get this message through to Washington, maybe hold a meeting of CEOs in Washington on this very specific subject with politicians. Do a fly-in where you can get a number of chief executives down there and get our senators and congressman motivated to stop politicking this issue and start dealing with it.
Tanner: He's absolutely right on the competitiveness issue when you think of savings and international capital flows. If you look at China, eastern Europe, and Latin America moving into this type of forced savings regime, think what it means in terms of international capital flows. And when you're talking workforces, you know that German employers are going to Poland and the Czech Republic now because you don't have to pay a 42 percent payroll tax. Same thing's going to happen here.
Don W. Hubble (Angelica): I completely support the educational premise. We need to make our associates recognize that the money we're spending for healthcare is also part of that same money that's available for pension plans. As the cost of healthcare goes up, it takes dollars that we like to have available to help in planning their retirement. You really have to educate throughout the whole issue, both internally and externally.
Harry Gould, Jr. (Gould Paper): The main issue for our corporation--and I can't imagine it's too much differ ent elsewhere--is healthcare. We had a hiatus where annual increases were kind of kept under control; now it's out of control again. That's a major cost, and as the life expectation keeps increasing, it's going to be an ongoing problem.
Ed Teixeira (ATC Healthcare Services): Having had experience with the devastation that the home healthcare industry underwent because of the balanced budget act of '97, I know one thing. Congress told us, you guys aren't united, you really don't have a voice. The American Hospital Association, American Association of Nursing Homes speak with a voice. So if we want to do something, I think some kind of get together vehicle in Washington makes a great deal of sense. It takes perseverance and patience, but it does work.
The Buck Stops Where?
Jack J. Davis (Ventura Foods): There is a moral obligation on the part of senior management of the company, the CEO particularly, in educating, convincing and selling people on the idea that you have to be responsible for part of your own retirement package. We do a tremendous amount of education. And we ask them to address the question, "Where are the funds going to come from?" If you don't do something to help yourself today, it'll be too late if you start 10 years from now.
Spencer Williams (Persumma Financial): There's something like 90 million workers in America today, and only 40 million of them are in 401(k) plans.
Arthur Gensler (M. Arthur Gensler Jr. and Associates): The generational thing is the big issue. You clearly have young people who don't seem to know or care about saving. And we have a group of people who may live to be 100 in today's environment. And so what does that mean? If you retire at 65, and you've got 35 years to support yourself, is that a feasible thing? I think that's an issue.
Allen J. Lauer (Varian): The issue, the unanswered one, is what is the role of government? First of all, our younger employees just roll their eyeballs when you talk about Social Security. It's a tax to support today's retirees. They believe that it won't be adequate. And might or might not be there. Their biggest annoyance is the $10,500 limit on their own personal pre-tax contributions. Raising those limits would be a very popular move.
Thomas Hagan (Volex, Inc.): I am more pessimistic than you guys in that I have a factory workforce. My opinion is based on a 50 percent or less 401(k) participation rate in the factories, which I think is typical across the U.S. The government is going to get awfully upset if that is the only retirement vehicle that the middle class has. They're going to look at this 10 years from now and say, "Mr. Volex, why didn't you force them, or make amends, or do anything to put funds aside for those people who didn't participate?"
Michael Tanner (CATO Institute): The median income in the U.S. is $17,000. Under $20,000. It's about half the workforce making less than that. One percent of Americans own 50 per cent of the wealth of the country. Fifty-one percent of Americans are in vested and therefore accumulating wealth. When you look at handing it down from generation to generation, people who are invested have wealth that is inheritable. You get groups that get richer and richer and groups that fall further behind. This is terribly destabilizing in a democratic society.
Douglas C. Rhodes (Cexec): Back to the original question of where we stand philosophically, I think the consensus is that it's a joint responsibility of the government, the companies, and the individual. Most of the new jobs being created are minimum wage jobs. So, if we have full employment at those wage rates, what are companies to do? There is a limit to how much we can participate.
Thomas J. Garrity (AdvancePCS): Is Social Security a relevant concept in light of what retirement's likely to be 30 years from now? I guess where I come out is that the individual has to be the CEO of his or her own retirement. And yet, I think government al ways, as in all Western democracies, has the responsibility as the insurer of last resort.
Rhodes: What we have to hope is that we aren't overwhelmed by the problems of the individuals that really haven't participated in retirement funds. I've not met a company that hasn't been concerned about it, or a CEO who hasn't felt a personal responsibility to do something about it.
Gensler: It seems to me that the biggest fear that everyone has is medical expenses and the cost of drugs. The one terrible fear is, "What if I really get sick? Do I drain my family and everything else?" I'm violently opposed to taking that on, but somehow I do believe that government will have to have a fail-safe protection on that piece of the retirement expense.
J.P. Donlon (CE): Spencer, you promised some best practices.
Spencer Williams (Persumma Financial): Just a couple. There is a thing called automatic enrollment. In the first generation of that, you usually put everybody into a plan, and you give them the benefit of a 50-cent match. That's a 50 percent return on the dollar. You are seeing more and more of that in business, which is kind of a twin to a profit-sharing plan. You use your mature workers to educate the younger workers. It's a different angle on education.
Another is putting after-tax savings in the plan. It's a great way to get a consolidated account and start building.
And last, but not least, one company actually had kind of a reverse signing bonus. After a three-year tenure, the company contributed $5,000 to their 401(k) account. It was part of the contract when they came on board. They found that saving is a learned experience and a joyful thing. And the tip point was $5,000. When somebody had $5,000 it became meaningful, and it encouraged future savings. So, those are some of the best practices today.
Donlon: What sort of things can we reasonably expect in the near future?
Williams: Last year was the first time that elements of portability, not full portability, were introduced in legislation. In a sense, it fulfills our ethical responsibilities to people to allow them to save continuously. Kind of a clear, unobstructed path to and through retirement. That's a good thing. On the other hand, they get to run faster.
The other thing that was in legislation this year was not only raising the pre-tax limit, but also for the first time a look-back provision. And the look-back provision was essentially for someone who was 55 who hadn't made a full, or hadn't the opportunity to make a full, contribution in earlier years. You can certainly anticipate those issues being resurrected. The big one is the universal 401(k) and the privatization of Social Security.
Tanner: There was a veto threat on expanding the limits on 401(k)s. I assume that's gone now that we have a new administration. But you don't know how much Democratic support there is going to be. There were objections that this is another tax break for the wealthy.
Williams: At the last minute some parties came in and basically raised enough objections to put it back out into the hinterland.
Gensler: Does anybody really believe that the government would ever let Social Security go? In other words, not deliver.
Tanner: I don't believe it will. But, the two questions are: What will it deliver? And at what cost to you and your employees?
Today, if you took a vote inside the beltway the retirement age would get raised very quickly. You would have to raise the current age to about 72 in order to make Social Security solvent. It's not going to happen. It's the least politically popular of all proposals for Social Security reform. Privatization, higher taxes, all these things are more popular. In fact, a lot of people want to retire younger.
You also have serious problems. I am going to push papers until I probably keel over at my desk. However, there's a very big difference when you say to a longshoreman or a coal miner, you've got to raise your retirement age. You also have to deal with the racial disparity in life expectancy. So, you are going to have those sorts of issues when you get into raising the retirement age.
And it's just a bad deal. Especially for a sophisticated group. Your younger employees understand more about investment. They know that when they collect Social Security, the best they can hope for would be about a 1 percent rate of return on their money. Most young people would get a negative rate of return.
The rest of the world is recognizing this. That's why countries in Latin America and Eastern Europe, as well as England and Australia have privatized their systems.
Lauer: 100 percent?
Tanner: About 87 percent of Brits have moved into the defined contribution system.
Arnold Pollard (CE): What's the incentive?
Tanner: Much higher benefits and much higher rates of return.
Donlon: That's a key element. Social Security in countries like Chile becomes an inheritable asset.
Tanner: You actually have a property right in it that you don't have under Social Security. The Supreme Court in the U.S. ruled in the case of Mester vs. Fleming that there is no legal right to Social Security benefits based on paying Social Security taxes. It's a tax, and like the young people are saying, essentially a welfare program.
Donlon: Which would shock most average American workers if they knew that.
Tanner: That's right. Congress can take away their benefits or change them anytime they want. And they do. We have raised Social Security taxes 38 times since the program began. We have reduced benefits. With a privatized system, you own that account. That's a huge difference.
Barry A. Fromberg (Suiza Foods): So what's the problem?
Tanner: There are two problems. One real and one political. The real problem is that you do have to find a way to fund the transition from one system to another.
Pollard: Other countries have faced similar problems.
Tanner: That's right. It can be done. But, it can't be done painlessly. And that's always a problem for politicians. The fact is if we are going to allow young people to take a part of their payroll tax and invest it, then you've got to continue to pay the current beneficiaries their benefits. That means finding money somewhere else. Money is available. You have a $6 trillion surplus projected. You could borrow money. You could raise taxes. You are going to have to do all those things to keep the current system going. The problem is that you have to do it today, rather than tomorrow.
The second political issue is what happens when you don't have a division between labor and capital anymore. Many politicians in Washington have made careers out of pitting these groups against each other, and they're terrified of what it means when every worker is worried about his investment vehicles.
I will say this year there is a real opportunity. Exit polls show that Americans came out 57 percent in support of some form of privatization. You have people in both political parties who are supportive.
Pollard: When it comes to hard political choices in this country, 99 per cent of the time, politicians wait until there is a crisis that strikes fear in the hearts of people and makes the majority at least appreciate that something has to be done. And it holds their feet to the fire and forces the issue.
Tanner: I fear that's a distinct possibility. And the danger is that the longer you wait the harder it becomes to do. Right now you have the baby boomers at their peak earning years. If you wait until they pass into retirement, you have less money available with which to do anything and more people you've got to take care of. What you are liable to end up with again is 1983, when the checks weren't going to go out and they said, "Oh God, we have to raise taxes." And you had a huge payroll tax increase. I can see that happening again in 2015."
Davis: It has to be done in this administration in that the bubble of income is only available in this next four-year window, or we'll go into crisis management.
Donlon: This issue that Bush had favored is reportedly now drifting off his first agenda. Is that true or false?
Tanner: It has for a couple of reasons. One is that there is no point person in the administration who is dealing with this right now. The second is that they are spending a great deal of effort on this tax cut plan. The tax cut and this are not mutually exclusive, but right now that's where they are focusing their energy. Which means that people have to tell them to get back to the Social Security issue.
Gensler: Can I go back to Medicare? Isn't it part of this thing?
Tanner: I wish I had a good answer on Medicare. I love to talk Social Security, and I hate to talk Medicare. Social Security politically is difficult. Economically, you can do the numbers very easily. Healthcare costs are a function of so many other issues that it becomes very difficult. But, we are going to have to have major Medicare reform in the next few years. The unfunded liability for Social Security is $21 trillion dollars. Medicare's unfunded liability is probably close to double that.
There's a huge international competitiveness issue. There's a reason Mercedes Benz builds plants in North Carolina and not in Germany. They're paying 41 percent payroll tax on top of whatever wages there are. When our payroll tax is at that level, where are they going to build plants? What's it going to cost to employ people?
Second, think of the capital forward issues when you have these savings regimes in some of these other countries. What is that going to mean for world capital flows? We could get very much left behind on those issues.
Lauer: There is an economic issue here, too. Because to solve these problems really requires an increase in savings. And we know what the savings rate is these days in the U.S. If savings are stimulated, it most likely would have an impact on the consumption economy that we have today. A serious impact. And a very serious impact on government revenues.
Tanner: Our savings rate is actually higher than the published rate. But still, among the lowest in the world. There are two ways to move to a privatized system. One is that you increase that national savings, which leads to greater investment and growth. The second is you have in effect a marginal tax cut on labor, which leads to greater productivity. So, you also increase economic growth in that way as well.
To compare two countries, Chile's savings in individual accounts are now equal to about half of GEP. Shortly they will be the equivalent of GEP and be managed by these accounts. In Japan, one of the reasons they are thinking of privatizing Social Security is to create more liquidity in their markets. For all the talk about the Japanese stock market, about 80 percent is held in blocks by corporations, and it never trades. So there is very little venture capital. They see this as a source of tradable funds.
Donlon: Is there a headline answer as to how this issue will play out, in terms of either getting resolved or muddling through? And what actions should business be taking?
Lauer: My general feeling is that there is not enough consensus in the present political atmosphere to get us very far. I think without the Democrats coming over to this issue, we are just not going to get there. We will continue to demagogue the issue. As far as my own actions, every time I have a discussion like this it shows that we must really work with our employees to make sure that they're knowledgeable in 401(k)'s and investments.
Gensler: I'd say it will be an evolutionary versus revolutionary change. We will make some progress, but not what we should. I really believe that we have to look at the redefinition of retirement and how to address the medical thing, which is almost as important as the Social Security issue. I have been thinking that I have been doing such a fabulous job with my ESOP and profit sharing. But I have not done a very good job at explaining wealth creation, and that is something on which I've got to spend a great deal more time. That's a sea change for me.
Fred Healey (Feature Films for Families): I agree that it will be evolutionary, not revolutionary. Americans by nature like crisis management more than we like planning ahead. What we need to do is spend more time educating our people on wealth creation and also creating some additional incentives. There are some unique vehicles we can create that will motivate people to save and plan for the future.
Fromberg: I have always been somewhat of a pessimist when it comes to how Capitol Hill works and the ability to get things done. I personally am going to try to become more active and talk about this issue and try to move the agenda more toward this issue.
Thomas Furst (SRI International): I have a hard time seeing enough people quickly mustering the courage to deal with this.
Davis: I think how it will play out really depends on how people like ourselves, business and community leaders, envision our role and use our influence very aggressively. Understanding that time is of the essence, we have to lobby our congressional leaders to do something about this, to realize this isn't a problem we can postpone.
* Larry Austin is chairman and chief executive of Melville, NY-based Austin Travel, a $700 million travel services company.
* Tracy Bahl is president of strategic solutions for Minnetonka, MN-based Uniprise, a $1 billion customized health care benefits program provider.
* Ronald M. DeFeo is chairman and chief executive of Westport, CT-based Terex, a $2 billion construction- and mining-related equipment manufacturer.
* Barry Feld is president and chief executive of Matthews, NC-based PCA International, a $227 million portrait studios operator.
* Harry E. Gould, Jr. is chairman, president, and chief executive of New York City-based Gould Pa per Corporation, a $900 million printing and business papers distributor.
* Don W. Hubble is chairman, president, and chief executive of Chesterfield, MO-based Angelica Corporation, a $462 million laundry service and textile rental supplier.
* Gary L Jamison is president and chief executive of Chicago, IL-based UGN, an auto sound parts manufacturer.
* Peter W. Nauert is chairman, president, and chief executive of Chicago, IL-based Ceres Group, a $372 million insurance provider.
* Dan Robinson is president and chief executive of Dallas, TX-based Placid Refining Company, a $600 million petroleum refining company.
* Rick Shoff is executive vice president of New ton, MA-based Persumma Financial, a full-service 401(k) provider.
* Michael Tanner is a senior fellow of Washing ton, DC-based CATO Institute, a nonpartisan public policy research foundation.
* Ed Teixeira is chief operating officer of Lake Success, NY-based ATC Healthcare Services, a provider of hospital staffing services.
* James Williams is president and chief executive of Burlington, NC-based Great American Knitting Mills, manufacturer of the "Gold Toe" brand men's hose.
* Richard (Dick) C. Williams is vice chairman of strategic planning for Bonita Springs, FL-based King Pharmaceuticals, a $350 million manufacturer of prescription pharmaceutical products.
* Spencer Williams is chief executive of Newton, MA-based Persumma Financial, a full-service 401(k) provider.
* Jack J. Davis is president and chief executive of City of Industry, CA-based Ventura Foods, a $634 million manufacturer of edible oil related products.
* Barry A. Fromberg is chief financial officer of Dallas, TX-based Suiza Foods, a $4 billion dairy products processor and distributor.
* Tom Furst is chief financial officer of Menlo Park, CA-based SRI International, a leading research and technology development organization.
* Thomas J. Garrity is chief financial officer of Scottsdale, AZ-based AdvancePCS, a $619 million health improvement company.
* Arthur Gensler is chairman of San Francisco, CA-based M. Arthur Gensler Jr. & Associates, $265 million architectural services firm.
* Thomas Hagan is president of Fremont, CA-based Volex, a leading producer of electrical and electronic cable assemblies.
* Fred Healey is chief financial officer of Murray, UT-based Feature Films for Families, a distributor and producer of motion pictures.
* Allen J. Lauer is president and chief executive of Palo Alto, CA-based Varian, a $598 million leading manufacturer of scientific instruments and equipment.
* Douglas C. Rhodes is president of Dulles, VA-based CEXEC, a software development and services company.
* Rick Shoff is executive vice president of Newton, MA-based Persumma Financial, a full service 401(k) provider.
* Michael Tanner is a senior fellow of Washington, DC-based CATO Institute, a nonpartisan public policy research foundation.
* Spencer Williams is chief executive of Newton, MA-based Persumma Financial, a full service 401(k) provider.