Ideas for Improving lagging retirement savings for lower- and moderate-income workers

Hello, I am writing this time as a member of the Retirement Reform Group, an informal, nonpartisan group of active and retired employee benefits attorneys working to address lagging savings for lower- and moderate-income workers.  If you are interested in this issue (and I hope you are), our website is: retirementreform.org. 

Members of the Retirement Reform Group participating in the American College of Employee Benefits Counsel Annual Meeting Education Program in San Diego, CA (October 10, 2026) are pleased to share handouts prepared for the meeting. While the seminar itself is not open to the general public, the following materials are available on our webpage:
- The Urgent Need and Incredible Opportunity to Expand Retirement Coverage through Efficient Plan Design (Richard Shea)
- The Challenges and Promise of Lifetime Income in a Defined Contribution World (Norman Stein)
- The IRA Protection Gap: Missing ERISA Safeguards, Rollover Vulnerabilities, and Paths to More and Safer Retirement Savings (Phyllis C. Borzi, Cynthia Van Bogaert)
- Improving Access to Non-Conflicted Retirement Information for Individuals and Small Employers (Maria O'Brien, Mark Iwry/Matthew I. Whitehorn, Lisa Germano)
-Why Aren’t They Saving? Real Plan Design and Demographic Barriers for Lower- and Moderate-Income Workers (Lisa M. Gomez)

We invite policymakers, practitioners, and other stakeholders interested in improving lagging retirement savings for lower- and moderate-income workers to access these resources here: https://retirementreform.org/resources/ under the Presentations and Materials section. 

Again, I am not providing legal or tax advice.  These are for informational purposes only.  You may share them with others.  Note that the Retirement Reform Group is limited to Fellows of the American College of Employee Benefits Counsel, but is not affiliated with the College.

If you have ideas about problems and solutions you see in your practice, I would love to hear your thoughts.

Cindy Van Bogaert 

Member, Retirement Reform Group

At this link the National Center for Employee Ownership (NCEO) has a study (about half way down the webpage) of their study that shows employee owned company's lower income employees have larger balances than non-employee owned industry peers company employees with same income. 

Sorry, I am a true believer in employee ownership and ESOPs after working in the industry for around 30 years.  But data like what they have says policies that support ESOPs and other employee ownership is good for all employees including lower income employees. I don't know if this conference had people from organizations like NCEO and the ESOP Association but I can tell you the NCEO's staff desires to talk to anyone who is willing to listen on why they think the evidence proves ESOPs are good for employee retirement security. 

https://www.nceo.org/research/research-findings-on-employee-ownership

I agree with @ESOP Guy's observations about the positive impact of ESOPs for all employees, although ESOPs are not a favorite type of plan for many entrepreneurs and private equity investors.  ESOPs for LLCs do seem to attract more attention now from these groups.

The biggest challenge to improving retirement savings for low-to-moderate income workers is their not having discretionary income that can be directed into retirement savings.  The middle class demographic is shrinking while both the upper and lower classes are both expanding (hence the common graphic of a K-shaped demographic).

With a national debt now exceeding $40 trillion, there likely is little appetite for programs or solutions at the national level.  Many business owners who are amenable to trying to increase employee retirement savings are unlikely to voluntarily raise wages and hope employees will "do the right thing". 

Given the types of plans that exist today, cash balance plans and defined benefit plans are the best bet for providing more affordable retirement income to low-to-moderate income employees.  This is a different from focusing on savings.  

Paul identifies the issue, but does not connect the dots with respect to ESOPs. The positive aspect of ESOPs for lower income employees is that they typically increase the employee's income via nondiscretionary increments to the ESOP accounts. That works because of the juice that the tax code injects into ESOPs that can improve savings for employees if the owners actually follow the spirit of the law. There are many ESOP success stories. There are also lots of ways to undercut the intent of Mssrs. Kelso and Long. The implementation of an ESOP can be accompanied by a reduction in nonelective retirement plan contributions or in collective bargaining by trading reductions in other income and benefits. The "primary benefit" requirement for ESOPS is quite often just a joke. Then there is the risk of a nondiversified retirement portfolio. There are also lots of ESOP failure stories.