Pension & Benefits News Bill would help women get a leg up on retirement security
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Tuesday, October 9, 2018

Bill would help women get a leg up on retirement security

By Pension and Benefits Editorial Staff

Senate Health, Education, Labor, and Pensions (HELP) Committee Ranking Member Patty Murray (D-WA) reintroduced a bill on September 12, 2018 that is aimed at addressing some of the challenges that families face as they plan for retirement, particularly women, who are more likely than men, Murray said, to face poverty in retirement.

Murray introduced similar legislation in the last Congress, on September 30, 2015, but it went nowhere; it was never even called up by the HELP Committee for consideration. The House version, introduced on December 10, 2015, fared no better; it was merely distributed to committees.

Strengthening women’s retirement security.  The Women’s Pension Protection Act of 2018 (WPPA), S. 3436, embodies a set of solutions that Murray said would help strengthen women’s retirement security by addressing some of the challenges that disproportionately affect women as they plan for their financial futures. Specifically, S. 3436 would:

  • 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.
  • Expand access to retirement savings plans by changing the minimum participation standards for long-term, part-time workers—most of whom are women.
  • Increase financial literacy by providing grants for community-based organizations to improve the financial literacy among women who are of working or retirement age.
  • Support low-income women 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.

Here’s the problem.  About 29 percent of households headed by individuals aged 55 through 74 have no retirement savings, according to a fact sheet about the bill. Approximately 34 percent of the private sector workforce lack access to a workplace retirement plan. The fact sheet also points to the following:

  • Women often lag significantly behind their male counterparts in preparing for retirement as their median retirement income in 2014 was 54 percent of men’s retirement income;
  • Women are 80 percent more likely to face poverty in retirement.
  • Women make up the majority of low-wage and part-time workers and accordingly are less likely than others to participate in a workplace retirement plan.
  • Women are more likely to leave the workforce to become caregivers, which has a considerable and long-term impact in terms of lost wages and Social Security benefits.

“Ensuring economic equality, opportunity, and security for women means not only tackling the barriers they face in the workforce, but those they face in retirement as well,” Murray said in a statement. “We know that unfortunately women are more likely to face poverty in old age, which is why I’m reintroducing the Women’s Pension Protection Act to help address some of the challenges that disproportionately impact women as they plan for their financial futures.

The bill is co-sponsored by 16 Senate women, all Democrats. The legislation has also been endorsed by AARP, the National Women’s Law Center, the Society for Financial Education and Professional Development, and the Pension Rights Center.

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