Op-ed: This laws will create a retirement restoration plan for tens of millions of People
House Ways and Means Committee ChairmanRep. Richard Neal, D-Mass., (left) and ranking member Kevin Brady, R-Texas.
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Bipartisanship is not what most of us would expect in a divisive election year. Yet that is what we saw when Democratic and Republican House members came together and introduced legislation to enhance American workers’ retirement security.
The newly introduced House bill, the Securing a Strong Retirement Act of 2020, includes several proposals from the Insured Retirement Institute and others we support to help workers meet their retirement needs.
House Ways and Means Committee Chairman Richard Neal, D-Mass., and Ranking Member Kevin Brady, R-Texas, spearheaded the bipartisan negotiations that produced this bill.
Action was needed quickly, so we applaud their leadership for acting on this critical issue.
The pandemic has added obstacles to workers’ ability to plan and save for retirement, particularly those close to retirement age. The longer we wait, the more likely that too many Americans will lose the opportunity to accumulate savings to build a nest egg that provides sustainable income in their retirement years.
Congress and President Donald Trump last year enacted the Setting Every Community Up for Retirement Enhancement (SECURE) Act, which expanded access to workplace retirement plans and increased workers’ opportunities to obtain protected lifetime income products.
The SECURE Act was the first step toward reversing the looming retirement crisis where too few workers are saving adequately. Now, the Covid-19 pandemic and its associated economic harm have added to retirement anxiety for millions of Americans.
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The numbers continue to tell the story: 10,000 Americans retire every day. A survey commissioned by the Alliance for Lifetime Income found that 70% of retirement savers are more pessimistic because of the pandemic, and 56% of those may now retire later than originally planned. The survey also found that only 1 in 3 Americans are very confident they will cover all their retirement expenses.
A Transamerica survey found more than half of workers say the pandemic has affected their employment situation, such as reduced hours, pay cuts, laid off or furloughed, and early retirements. These employment actions can reduce workers’ ability to contribute to employer-provided retirement accounts. One in 5 workers either have or plan to withdraw funds from retirement accounts to cover current living expenses, potentially putting retirement security further out of reach.
In April, the Insured Retirement Institute recognized that the pandemic and social distancing measures implemented to combat it would negatively affect retirees and workers saving for retirement. We acted quickly to propose a five-point recovery plan for retirement savers. We urged Congress to include our plan as it considered other measures to address the pandemic’s health and economic challenges.
This new legislation would build upon the SECURE Act’s success to help workers and retirees save more so they can achieve a financially secure and dignified retirement. Like the SECURE Act, this new bill is a comprehensive, bipartisan approach to improve employer-provided retirement plans for workers by enhancing access and features.
The legislation includes provisions to help young workers save for retirement while repaying student loans and permits catch-up contributions for baby boomers close to retirement. It also clarifies tax incentives for small-business owners to encourage them to offer a workplace retirement plan.
The legislation increases the age at which retirees must take minimum distributions from retirement accounts, allowing more time for savings to grow. It also eliminates barriers that prevent greater use of lifetime income products to reduce the risk of outliving savings and expands retirement saving opportunities for non-profit organization employees.
Many Securing a Strong Retirement Act of 2020 provisions are similar to those in a bipartisan Senate bill introduced by Sen. Rob Portman, R-Ohio, and Sen. Ben Cardin, D-Md. With such broad agreement in Congress, a solution to help millions of American workers is within reach.
Congress continues to demonstrate resolve toward addressing retirement issues with common-sense proposals that attract bipartisan support. While the SECURE Act will make a substantial difference for millions of American workers and retirees, the Securing a Strong Retirement Act of 2020 will deliver additional, needed retirement security solutions.
We have the right legislative solution, the right leadership, and bipartisan support. Acting now will demonstrate once again that Congress can deliver bipartisan solutions to help workers and retirees when they need it most.
— By Wayne Chopus, president and CEO of the Insured Retirement Institute