Background

Issue #1: The retirement system in the United States is failing. Professionally managed & defined benefit plans are a relic of the past. Today, defined contribution plans, or 401(k) plans, are the most common form of retirement plan offered by businesses to their employees. This has had a deleterious effect on the ability of employees to save for retirement. According to a recent 20-year study, these types of plans have returned about 78 percent less that the broad market*. Poor performance of 401(k) plans is attributed to the combination of poor investment strategies as well as hidden and often excessive fees charged to participants’ accounts. The Hawaii Prosperity Plan will offer 5 professionally built and diversified investment portfolios from which 401(k) participants can select. Moreover, these portfolios will be constructed using only low-cost index funds to keep more retirement income savings where it belongs, in the hands of employees.

Issue #2: The supply of capital to Hawaii’s businesses is diminishing. The credit crisis across the country and in Hawaii is limiting the flow of money to the engines of Hawaii’s economy: small business. The Hawaii Prosperity Plan offers 401(k) participants the opportunity to prudently invest back into Hawaii’s economy. As a result, an entirely new capital and investor base will be created to spur our economy and shape the growth of Hawaii for years to come.