Compliance July 22, 2021

Women’s Retirement Protection Act Reintroduced in Congress

Democratic lawmakers in the House and Senate say the bill is needed to help address longstanding retirement insecurity issues—and to address some of the negative impacts of the pandemic.

Reported by

U.S. Senator Patty Murray, a Democrat from Washington who is the current chair of the Senate Health, Education, Labor, and Pensions (HELP) Committee, and Representative Lauren Underwood, D-Illinois, have reintroduced the Women’s Retirement Protection Act of 2021 (WRPA).

According to the lawmakers, the legislation aims to address the gender-based retirement savings gap and bolster women’s financial security overall. They say the reintroduction comes in light of the COVID-19 pandemic and the related economic crisis that has disproportionately impacted women, particularly women of color.

Never miss a story — sign up for PLANADVISER newsletters to keep up on the latest retirement plan adviser news.

“COVID-19 has upended the finances of families across the country and led to severe job loss, especially in sectors like child care that disproportionately employ women, particularly women of color,” Murray says. “Even before this pandemic, women in America typically had less money saved for retirement, in part because they were paid less than their male counterparts for the same work throughout their careers. Inequities, like investments, compound over time—which is why it is so critical we take action now to address how this pandemic and other challenges are undermining women’s financial futures.”

Underwood echoes these warnings, noting that even before the COVID-19 pandemic, data has long shown women’s financial futures are undermined by various factors. She and Murray cite data from the National Women’s Law Center, showing the average woman loses more than $400,000 over a 40-year career due to pay inequality, requiring women to work for almost a decade longer than their male counterparts to make up the gender wage gap. The same research shows women are also more likely to be part-time workers—which can limit their access to employer-sponsored retirement plans. They may also be prevented from securing the retirement resources they are entitled to following a divorce due to barriers like complex rules and legal fees.

Responding to these issues, the WRPA includes a set of solutions that work to close the retirement gap by addressing some of the challenges that disproportionately affect women as they plan for their financial futures. The legislation, according to its sponsors, would strengthen consumer protections to safeguard retirement savings, increase eligibility for employer-sponsored retirement savings plans for part-time workers, increase access to information about retirement and savings tools, and help women with low incomes and survivors of domestic abuse get the retirement benefits they are entitled to following a divorce.

Among other goals, the WRPA would pursue the following:

  • Strengthen consumer protections to safeguard retirement savings by expanding existing spousal protections for defined benefit plans to defined contributions plans to prevent one spouse from making decisions that might undermine a couple’s retirement resources without the other’s knowledge and consent.
  • Ensure more part-time workers are offered retirement savings plans by expanding the minimum participation standards for part-time workers—most of whom are women.
  • Increase access to information about retirement and savings tools by providing grants for community-based organizations to help provide information and financial tools to women who are of working or retirement age.
  • Support women with low incomes and survivors of domestic abuse seeking retirement benefits by providing grants for community-based organizations that assist them in obtaining qualified domestic relations orders, the legal instruments that allow for the division of retirement benefits—assuring they receive the retirement benefits they are entitled to following a divorce or legal separation.

The bill enjoys more than a dozen co-sponsors it the Senate, and a handful of co-sponsors in the House—all of them Democrats.

Upon its reintroduction, the WRPA immediately received endorsements from the National Women’s Law Center, the Pension Rights Center and AARP.

“Women, especially women with low incomes and women of color, were facing a retirement crisis even before the pandemic,” says Amy Matsui, director of income security at the National Women’s Law Center. “Without swift and targeted action, women will feel the impact of the past year and a half of economic devastation for the rest of their lives. The Women’s Retirement Protection Act will take meaningful steps to safeguard and protect women’s retirement security.”

Karen Friedman, executive director of the Pension Rights Center, says the bill would effectively expand savings options for part-time workers, provide help for women in obtaining a share of their former spouse’s retirement benefits at divorce, and improve spousal rights in 401(k) plans.

Full text of the Women’s Retirement Protection Act can be found here.

Compliance July 22, 2021

Efforts to Boost Americans’ Retirement Savings Continue at Full Speed

Congressional leaders and asset management executives say they are committing to furthering legislation to expand coverage and boost savings

Reported by

A Securities Industry and Financial Markets Association (SIFMA) webinar earlier this week highlighted several efforts being made by congressional leaders and asset management firms, including Natixis and Edward Jones, to draw policymakers’ attention to key retirement research findings, expand the dialogue about the pressing need to help Americans better prepare for retirement, and pass additional legislation to expand retirement plan coverage and boost savings.

Kicking off the webinar, Ken Bentsen, SIFMA president and CEO, said one-quarter of people who have not retired have no money saved at all for retirement, and another 40% are not on the right track to retire successfully. He also noted that the laws governing retirement plans today are rooted primarily in the 1970s tax code, which provided incentives for people to save money in qualified (i.e., pre-tax) accounts. Bentsen said that in the 50 years since these laws were passed, retirement plan advisers’ role in guiding Americans and retirement plan sponsors to save for retirement has increased, and new proposals could help workers save more.

Want the latest retirement plan adviser news and insights? Sign up for PLANADVISER newsletters.

U.S. Rep. Jackie Walorski , R-Indiana, said she is grateful for ongoing efforts by investment management firms, broker/dealers (B/Ds) and others in the retirement planning industry to help Americans understand the importance of saving for retirement—and the need to do something about it.

This is “especially true as we recover from the pandemic,” said Walorski, who is a member of the House Ways and Means Committee. “There have been unexpected financial consequences of the pandemic,” she noted, referring to the layoffs, furloughs and reduced hours that many Americans experienced.

On a positive note, Walorski said the proposed “SECURE Act 2.0”—formally known as the Securing a Strong Retirement Act—would expand automatic enrollment. Furthermore, the Military Spouses Retirement Security Act includes a provision to expand retirement savings coverage to military spouses within two months of hire. It would also encourage small employers to give workers’ spouses access to a retirement plan, she said. Combined, these efforts “would help American families in a meaningful way,” she noted.

Another piece of proposed legislation is the Expanding Access to Retirement Savings for Family Caregivers Act, which Walorski helped introduce. Caregivers miss multiple years of savings, on average, and this bill would allow those 50 and older who took at least one year out of the workforce to care for a family member to contribute additional catch-up funds and remedy this issue. “There are many bipartisan solutions [being proposed], and we are working together” on both sides of the aisle, she said. “Keeping the American Dream alive is essential.”

Walorski also encouraged asset management executives and researchers on the call to continue to tell “stories about people’s lives” as they relate to retirement preparedness. “It’s the right thing for them—and for you” to do, she said.

Jesse Hill, director of regulatory relations, Edward Jones, also discussed the new retirement approach his asset management firm has developed in partnership with Age Wave. Called the “Four Pillars of the New Retirement,” Hill said each of these four pillars—health, family, purpose and finances—are interconnected and that retirement plan advisers and sponsors should consider each pillar when helping participants prepare for retirement.

Alex Reed, senior reputation management specialist at Edward Jones, noted that the firm has also pinpointed four main statistics dealing with the “Four Pillars of the New Retirement,” adding that all the data is available online for lawmakers, retirement plan advisers, sponsors and others to use. The figures are primarily based on an Edward Jones survey that was conducted among 11,000 Americans, as well as retirement experts. Reed concluded his remarks by encouraging retirement plan advisers and plan sponsors to reach out to Edward Jones and/or Age Wave to “tell us about the historic COVID-19 pandemic” and how it might have negatively, or even positively, impacted workers.

The end goal, Reed and other speakers said, is to help American workers be better prepared for retirement. Those factors now include any downside that the COVID-19 pandemic has caused.

«