Ahead of Equal Pay Day, Murray, Schakowsky, Underwood Announce Bill to Address Retirement Gap, Strengthen Women’s Financial Futures

Women lose over $400,000 over a forty-year career due to the wage gap, and are 80 percent more likely than men to face poverty in retirement

Bill changes minimum participation standards for long-term, part-time workers—most of whom are women— to expand access to retirement plans

Legislation extends spousal protections against one spouse undermining a couple’s retirement resources without the other’s knowledge and consent

Bill includes grants to help low-income women and survivors of domestic abuse receive retirement benefits they are entitled to following a divorce

INFOGRAPHIC: The Retirement Gap

(Washington, D.C.) – Today, Senator Patty Murray (D-WA), ranking member of the Senate Health, Education, Labor, and Pensions (HELP) Committee, Congresswoman Jan Schakowsky (D-IL9) and Congresswoman Lauren Underwood (D-IL14), announced next week they will introduce the Women’s Retirement Protection Act of 2019 (WRPA), legislation to address the retirement gap and bolster women’s financial security. According to the National Institute on Retirement Security (NIRS), women of retirement age typically have an income that is three-fourths that of men, and they are 80 percent more likely than men to be impoverished. Women not only have fewer resources than men to support themselves in retirement, they also tend to live longer than men, meaning they must make their smaller retirement savings stretch over a longer period of time.

“As we fight for the economic equality, opportunity, and security of women in the workforce, we must also fight for those in retirement and make sure all women have the resources they need to support themselves and their families throughout their lives,” said Senator Murray. “That’s why I’m fighting to address the retirement gap with steps like ensuring equal pay, that would give women more income to plan their financial futures around, and legislation like the Women’s Retirement Protection Act that would help women get the tools and resources they need to prepare for retirement.”

“On the heels of passing the Paycheck Fairness Act in the House, and on the eve of Equality Day, our work to win full equality for women in America must include addressing the retirement gap,” said Congresswoman Schakowsky. “Because they are much more likely to earn less than their male counterparts, women in America typically have less money saved up for retirement. The Women’s Retirement Protection Act takes crucial steps toward closing that gap. It improves spousal access to retirement plans, makes more long-term and part-time workers eligible for retirement plans, and improves financial literacy. Coupled with our ongoing effort to protect and strengthen Social Security and Medicare, this bill would go a long way in ensuring a secure retirement for American women. I am proud to once again join Senator Murray in this effort and to have my friend and colleague from Illinois, Congresswoman Lauren Underwood, by my side here in the House.”

“Women deserve the same economic opportunity as men throughout their lifetimes, but often retirement is left out of that conversation as women continue to face disproportionate barriers. Retirement security is economic security,” said Congresswoman Underwood. “I’m honored to introduce this bill alongside Senator Murray and Congresswoman Schakowsky to ensure women have equal opportunity as they plan their financial futures.”

WRPA includes a set of solutions to address the retirement gap and some of the challenges that disproportionately affect women as they plan for their financial futures. The legislation would strengthen consumer protections to safeguard retirement savings, improve access to retirement savings plans for long-term, part-time workers, increase access to information about retirement and savings tools, and help low-income women and survivors of domestic abuse get the retirement benefits they are entitled to following a divorce.

WRPA 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 access to information about retirement and savings tools by providing grants for community-based organizations to help provide information about financial tools to 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.

The Senate co-sponsors of the Women’s Retirement Protection Act of 2019: Senators Tina Smith (D-MN), Elizabeth Warren (D-MA), Tammy Baldwin (D-WI), Debbie Stabenow (D-MI), Jeanne Shaheen (D-NH), Amy Klobuchar (D-MN), Bernie Sanders (I-VT), Kirsten Gillibrand (D-NY), Tim Kaine (D-VA), Dianne Feinstein (D-CA), Maria Cantwell (D-WA), Catherine Cortez-Masto (D-NV), Mazie Hirono (D-HI), Tammy Duckworth (D-IL), Maggie Hassan (D-NH), Kamala Harris (D-CA), Jeff Merkley (D-OR), and Bob Menendez (D-NJ).

The legislation has also been endorsed by AARP, National Women’s Law Center, Pension Rights Center, and the Society for Financial Education and Professional Development.

Click HERE for a summary of the Women’s Retirement Protection Act.

Click HERE or see below for fact sheet.

Download a PDF of the infographic HERE.

The Women’s Retirement Protection Act of 2019

FACT SHEET

A secure retirement is one of the hallmarks of a strong middle class and an economy that works for all Americans, not just the wealthiest few. However, after decades of stagnant wages and barriers to saving adequately, far too few people are financially prepared for retirement. This retirement crisis especially affects women. Women lag significantly behind their male counterparts in retirement savings—the typical retirement income for women age 65 and older is 25 percent lower than that for men. Because of these financial challenges, women, age 65 and older, are nearly twice as likely to live in poverty, compared to men in the same age group. This is partly because women face systemic barriers, like unequal pay and time out of the workforce for caregiving duties, which make it more difficult to adequately save for retirement.

The Women’s Retirement Protection Act of 2019 (WRPA) would address some of these challenges by extending critical protections to women’s retirement security and providing enhanced tools to ensure women can better prepare for retirement.

Strengthen consumer protections to safeguard retirement savings. For many working families, their 401(k) plan is often their largest asset aside from their home. Under current law, one spouse could take a distribution or a loan from the plan without the other spouse’s knowledge or consent. This could have a devastating effect on the unknowing spouse and the family. WRPA would extend the spousal protections that are currently available for defined benefit plans to defined contribution (DC) plans like a 401(k). 

Expand access to retirement savings plans. Women make up the majority of low-wage and part-time workers. In many cases, employers do not offer retirement plans to these groups of workers. As a result, many women lack access and do not participate in any retirement savings plan. However, a recent GAO report found that 68 percent of the lowest income workers and 81 percent of part-time workers would participate in a plan if they had access. WRPA would expand coverage to these workers by amending the minimum participation standards for long-term part-time workers. The new standards would require employers to allow employees to participate in a plan once they have reached the earlier of the current minimum participation standards (age 21 or the completion of one year of service (generally 1,000 hours of service during a 12-month period) or once they have completed at least 500 hours of service for two consecutive years. 

Increase access to information about retirement and savings tools. One of the most promising ways to ensure people gain important financial and economic skills is through education. WRPA would increase access to information about retirement and savings through two methods. First, financial providers would be required to provide a link to the Consumer Financial Protection Bureau in any offer for the sale of a retirement financial product or service. This link would provide information and resources regarding retirement planning and/or retirement security. WRPA would also provide for grants through the Department of Labor to established community-based organizations to help provide information about financial tools to women who are of working or retirement age.

Provide assistance to help certain women obtain qualified domestic relations orders.  According to a 2016 survey from the American Academy of Matrimonial Lawyers, retirement accounts and pensions are one of the top three most contentious items in a divorce as they are often one of the largest assets of a divorcing couple. The process by which retirement accounts and pensions are divided is called a qualified domestic relations order (QDRO). QDROs are separate from a divorce agreement and despite the fact that fees and expenses associated with retirement plans have been in decline, fees related to QDROs are increasing.  The additional legal fees and other fees associated with QDROs are not typically contemplated in divorce proceedings. Low-income women and survivors of domestic violence are more prone to leave money on the table because of the added expenses and hassle of obtaining a QDRO.  WRPA would provide grants to community-based organizations to assist these groups of women in obtaining the benefits to which they are entitled through QDROs.

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