Addressing this issue is also a matter of fairness. Latino, Asian and Black populations are less likely to have access to work-sponsored retirement plans than White Americans. These types of disparities lead to inequitable outcomes. For example, according to a 2017 Urban Institute analysis, on average, black and Latino families in the United States had only about one-sixth of the liquid retirement savings of white families.
After a lifetime of hard work, older Americans shouldn’t have to worry about how they’re going to be able to feed themselves, pay for health care, or keep a roof over their heads.
This week, the House passed legislation to allow more Americans to save for a financially secure retirement and have peace of mind in their later years. The Securing a Strong Retirement Act of 2022 is bipartisan Ways and Means legislation from the United States House that will go a long way toward improving the long-term financial well-being of workers.
This bill expands automatic enrollment in 401(k) plans by requiring those plans to automatically enroll participants as soon as they become eligible, with the ability for employees to opt out of coverage. The expansion of automatic enrollment will significantly increase participation in workplace retirement savings.
The legislation improves start-up credit for small businesses, covering administrative costs for implementing a new plan and making it easier to sponsor a pension plan. Other provisions of the bill include increasing the age at which you must start withdrawing from your retirement account to 75 and indexing the catch-up contribution limit for retirement accounts, allowing people aged 50 or over to make additional contributions to their accounts. These changes will make it easier for American families to prepare for a financially secure retirement.
The bill also includes key protections for savers – it protects retirees who unknowingly receive pension plan overpayments, and it creates a national searchable online database of lost and found retirement savings. to the Department of Labor so that workers and retirees can find their lost retirement accounts.
Many refer to this legislation as “SECURE Act 2.0” because it builds on the bipartisan Setting Every Community Up for Retirement Enhancement (SECURE) Act, which was signed into law in late 2019. This bill threw solid foundations for the work we’re continuing this week. This has given an additional 4 million Americans the ability to save for retirement through their employers, and as a result approximately 600,000 to 700,000 new retirement accounts will be created.
The work of the Ways and Means Committee in the area of retirement is an increasingly rare example of members crossing party lines to achieve substantial political progress for the American people. This effort will significantly improve the financial security of workers in the Commonwealth and across the country.
Richard E. Neal is Chairman of the United States House Committee on Ways and Means.