November 4, 2019

The Honorable James T. Welch Chair, Joint Committee on Financial Services 24 Beacon St., Room 413-B Boston, MA 02133

The Honorable James M. Murphy Chair, Joint Committee on Financial Services 24 Beacon St., Room 254 Boston, MA 02133

RE: H. 1075, H. 1076, H. 1103, S. 574, S. 602, Establishing a Massachusetts Secure Choice Program

Dear Chairs Welch & Murphy:

The Securities Industry and Financial Markets Association1 is a national trade association which brings together the shared interests of more than 340 broker-dealers, banks and asset managers. Many of our members have a strong presence in Massachusetts where they provide services to investors and retirement plans, including advisory services, investment opportunities and plan recordkeeping.

As the legislature considers the various proposals outlined above, each of which would create a mandatoryon-employer state-run retirement plan for private sector workers, SIFMA strongly urges you to consider the following:

(1) Current Access to Retirement Savings. The market for retirement savings products in Massachusetts is robust and highly competitive. More than 175,000 people are employed in the finance and insurance industries, which provide numerous, fairly-priced retirement savings options, including 401(k), 403(b), 401(a) and 457(b) plans, as well as SIMPLE, SEP and traditional and Roth IRAs. IRAs are also readily available online and at most financial institutions. Lack of access is not the problem.

(2) Factors Other Than Access May Be Creating Underlying Obstacles to Savings. With a variety of options already available, factors other than access may be keeping people from saving. It is important that any state proposal address some of the underlying issues with retirement under-saving, including competing financial needs and a lack of understanding about the importance of saving over time. In fact, an AARP survey found that “No money left after paying bills” was the leading obstacle to retirement savings. Additionally, a survey by the California Secure Choice Retirement Savings Investment Board concluded that “the leading reasons for not saving more for retirement are not making enough money or needing to pay off debts.” Indeed, not earning enough, paying off debt, unexpected expenses and a focus on helping family were the top four responses, affecting 74% of all respondents. A state-run auto IRA program does not address this.

1 SIFMA is the leading trade association for broker-dealers, investment banks and asset managers operating in the U.S. and global capital markets. On behalf of our industry’s nearly 1 million employees, we advocate for legislation, regulation and business policy, affecting retail and institutional investors, equity and fixed income markets and related products and services. We serve as an industry coordinating body to promote fair and orderly markets, informed regulatory compliance, and efficient market operations and resiliency. We also provide a forum for industry policy and professional development. For more information, visit sifma.org