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The Need to Defend Promising Efforts to Protect the Retirement Security of Millions of Workers

By Anju Chopra on 03/22/2017 @ 01:00 PM

Tags: Federal Policy

While this country may be deeply divided on a number of issues, there is one subject that most people seem to agree on - that lots of households in this country do not have enough saved up for retirement. The results of a recent survey on retirement in America found that close to 90% of participants feel the country is facing a significant retirement crisis, and estimates suggest that more than half the workers in this country have no employer-sponsored retirement plans. This amounts to tens of millions of people with little or nothing to retire on.

Reported by the National Institute on Retirement Security (NIRS), the survey also reveals a lack of satisfaction with the actions the federal government has taken to close this gap. Approximately 85% of respondents said they do not think Washington understands the challenges faced by ordinary people when it comes to saving for retirement, and a similar percentage think the leadership in Washington should be doing more to address the issue.

Indeed, while Washington has come up with some retirement savings vehicles for uncovered workers - like myRA – it has yet to enact a program that would substantially reduce the number of people without savings plans.

The Good News

Faced with this federal inactivity, states have started to step up to the plate and enact innovative programs of their own that are aimed at ensuring the retirement security of their workers. State-run automatic enrollment programs are particularly promising initiatives. These programs set up retirement accounts for uncovered workers automatically, which they can opt out of at any time. Managed by the state, they alleviate some of the administrative burdens that keep employers – particularly small businesses – from offering retirement benefits.

These and other state-facilitated programs have the potential to provide retirement savings for a significant number of uncovered employees. Five states – California, Oregon, Illinois, Connecticut and Maryland – are in the process of developing programs, which research suggests could cover as many as 13 million workers. Many more states are considering them, and the NIRS survey indicates these programs are very popular. Seventy-five percent of respondents said they support state programs and more than 80% said they would participate if given the chance.

The Bad News

Unfortunately, there are actions taking place right now in Congress that could put these up-and-coming programs in jeopardy and discourage other states from considering them. Last year, the Department of Labor passed regulations that make these state-run programs simpler and safer to adopt.

Now Congress is trying to repeal them, using a little known law called the Congressional Review Act. In February of this year, the House of Representatives passed H.J. Res 66 & H.J. Res 67, resolutions that would abolish these regulations and bar the passage of any “substantially similar” agency rulemaking in the future. Then in early March, the Senate introduced S.J. Res 32 & S.J. Res 33, companion resolutions that would do the same thing.

What You Can Do

H.J. 66 & 67 and S.J. 32 & 33 may be coming up for a vote in the Senate very soon. We are urging people to call their Senators and ask them to vote ‘NO’ on all of these resolutions, which would make the already difficult problem of retirement security even worse. If you need contact information for your Senator, click here.

If these resolutions pass and the status quo is maintained, a lot of people are going to enter retirement without enough money, creating an untold number of hardships. That so many people could experience financial instability after working for years is a sobering prospect. It is time to oppose these resolutions and any other efforts to undermine the right of a state to implement innovative policy solutions to look after the retirement security of their citizens.

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