Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: TUESDAY, September 20, 1994                   TAG: 9409230024
SECTION: BUSINESS                    PAGE: C-8   EDITION: METRO 
SOURCE: Associated Press
DATELINE: CHESTNUT HILL, MASS.                                LENGTH: Medium

ECONOMISTS SEE RETIREMENT CRISIS

Karen Ferguson, executive director of the Pension Rights Center in Washington, said the nation is suffering a retirement savings crisis. Many baby boom-age workers fail to realize that Social Security pays out ``less than what kids working at McDonald's get,'' she said.

``The median income of people over 65 is $10,200,'' Ferguson said. ``Most people don't have savings. A third of them don't have income from savings whatsoever. ... People are hurting desperately today.''

A panel emphasized the need for workers to begin a retirement investment plan as soon as possible, setting aside 10 percent of their take-home pay for the retirement plan.

The comments were made at a gathering of top government and private economists at Boston College.

At the same meeting, Federal Reserve Chairman Alan Greenspan revived a call to scrap Depression-era restrictions on the nation's banks and free them to sell insurance and expand into the securities business.

Greenspan's call came at a high-powered conference on the future of the financial markets, and came at a time of considerable change for banks and financial services companies.

President Clinton is poised to sign legislation that would dramatically reform banking by letting banks open branches nationwide.

In addition, the computer era is revolutionizing how banks, insurance companies and mutual funds do business: credit cards can be ordered via 800-numbers, and stocks can be bought and sold over home personal computers.

Meanwhile, a dramatic shift is taking place on where households put their savings. Assets in mutual funds now exceed those in bank deposits, said Arthur Levitt Jr., chairman of the Securities and Exchange Commission.

These advances provided the backdrop for a wide-ranging discussion on the financial services industry. In this spirit of change, Greenspan called for the repeal of a 1930s-era banking law known as the Glass-Steagall Act.

That law forbids banks from underwriting insurance or securities deals, which back in the Depression days were seen as reckless ways for banks to make money because they put federally insured deposit money at risk.

Greenspan, who has previously urged the repeal of Glass-Steagall, said a new Fed review of banks' limited foray into securities trading and securities underwriting disputes the notion that bankers gamble with insured deposits. It showed bank ``risk levels to be moderate and the operations generally profitable,'' he said.

``Moreover, it seems obvious to me that the public is well served by additional competitors offering underwriting services,'' Greenspan said, adding this would particularly benefit banks' regional and smaller customers.