News January 12, 2024

A Song for Retirement Savings

TIAA partners with hip-hop star Wyclef Jean on a new track to bring attention to the retirement gap.

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TIAA has collaborated with hip-hop icon Wyclef Jean, a founding member of the Fugees, for a new song named “Paper Right,” intended to bring awareness and funding to the retirement savings gap.

The song features other artists—Pusha T, Lola Brooke, Capella Grey and Flau’jae—and aims to inspire younger generations to think about their financial legacy, as well as the importance of retirement planning. All sales of the song will go to First Generation Investors, a nonprofit committed to providing investing literacy to underserved high school students.

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“Paper Right is about building a financial legacy for future generations and the reward and gratification this brings. The most important thing I hope people take away from the song and my partnership with TIAA is that saving earlier can set you and your family up for long-term success,” Jean said in a statement. “As a father, when I look at my financial legacy and impact, I want to make sure my daughter is taken care of and has the tools needed to understand why saving early and preparing for the future is crucial.”

“Paper Track” is part of TIAA’s #RetireInequality campaign, launched in 2022, to draw attention to retirement and savings gaps experienced by Black Americans. According to the Center for Retirement Research, 54% of Black Americans do not have enough money saved to maintain their standard of living in retirement, which adds to America’s larger retirement savings gap. It, in turn, is the driving force behind federal and state policy efforts and a focus area for advocacy groups such as the AARP. 

Thasunda Brown Duckett, the president and CEO of TIAA, wrote in a LinkedIn post about the campaign that, the song is “meant to inspire all generations to consider their legacy and ability to retire.”

“Starting to plan for retirement early in our careers is key to closing America’s very real retirement savings gaps, ” Duckett wrote.

Proceeds of every sale of the track on streaming services will be automatically donated to FGI, which was chosen for its contributions to the advancement of financial education for the younger generation, according to TIAA’s announcement.

“First Generation Investors is an organization dedicated to providing underserved high school students with the financial knowledge and tools needed to take control of their financial futures,” Stephanie Pressley, executive director of FGI, said in a statement. “We are thrilled to partner with TIAA to retire inequality, as these efforts closely align with our mission.”

“Paper Right” is available on all streaming services, including Spotify, Apple Music and Amazon Music.

TIAA also announced the start of #StreamToStack, an Instagram advertisement in which, if a user points a camera phone at a dollar bill, an animation showing single bills building into a stack of money will be shown before a link to stream the song.

“While retirement may feel far away for younger Americans, the reality is that having these conversations now can help them achieve a financially secure future,” Zara Mirza, TIAA’s chief brand officer, said in a statement. “The goal is for ‘Paper Right’ to have real impact and spark thought among those starting in their careers to consider their financial future and retirement.”

Compliance January 12, 2024

American Securities Association Wants DOL Employees Recused From Work on Fiduciary Proposal

The ASA requested that Congress identify and consider removing from the project certain DOL staff involved with the proposal.

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The American Securities Association wrote a letter on Wednesday to the U.S. House Committee on Financial Services Subcommittee on Capital Markets calling on the subcommittee to identify Department of Labor staff involved with the creation of fiduciary proposal, sometimes called the retirement security proposal. This request drew condemnation from Phyllis Borzi, a former assistant secretary of Labor.

The letter asks that the subcommittee “request that the DOL identify, with specificity, the career employees who have been involved, directly or indirectly, in this policy initiative over the last decade. Evaluate whether these individuals are acting in the best interest of the American people and what outside influences may be informing their actions. Evaluate whether these people should be recused from working on this issue, including finalizing the current rule and any releated [sic] lawsuits.”

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The retirement security proposal would extend fiduciary duty under the Employee Retirement Income Security Act to certain one-time transactions, such as rollovers and annuity sales. The DOL has been trying to regulate on this issue for many years, as the letter says, and one final rule, similar to the current proposal, was vacated by the 5th U.S. Circuit Court of Appeals in 2018.

The ASA’s letter argues that the DOL has wasted considerable public resources in pursuing this rulemaking despite previous setbacks and that “American taxpayer dollars continue to be spent on policy initiatives that the courts have repeatedly deemed illegal.”

Borzi, a former assistant secretary of labor from 2009 to 2017, said of this letter that, “to my knowledge, no one has ever before made such a shocking or dangerous recommendation to publicly target career employees (and “out” them by name so that they become targets for abuse) for simply doing their jobs.  Obviously this is yet another not so subtle attempt to shut down a policy process that would help protect investors by mitigating losses they experience from conflicted investment advice just because these financial institutions prefer the status quo.”

Borzi added that, “if this advice to Congress is an indication of the type of mean-spirited thought process that goes into the recommendations that the members of this organization provide to their clients, we need far more than the DOL proposed regulation to protect investors from harmful advice.”

Michael Kreps, a principal in the Groom Law Group who previously served as a senior counsel for the Senate Committee on Health, Education, Labor and Pensions, says he had never seen a letter to Congress with this sort of request in it before. “I don’t recall seeing that kind of argument before, but I also can’t think of a rulemaking in the retirement space that is so controversial and has so much history.”

The DOL declined to comment, and the ASA had no further comment beyond the letter.

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