Women’s Retirement Protection Act Closes the Gap for Retirees
|thenorthstar||Apr 14, 2019|
Two Illinois Democrats introduced a bill to close the retirement gap experienced by women and improve their financial security. “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,” Congresswoman Lauren Underwood (D-Ill.), said in a statement.
The Women’s Retirement Protection Act of 2019 (WRPA) aims to extend protections to women’s retirement security and provide tools to help women prepare for retirement. “Retirement security is economic security. We must strengthen consumer protections, including working to ensure a spouse cannot undermine the retirement of their partner without consent,” Underwood continued.
Among its features, WRPA would extend the spousal protections for retirement savings plans such as 401(k) plans. Current laws allow one spouse to take a distribution or a loan from a couple’s 401(k) plan without their spouse’s consent or knowledge.
The bill would also expand access to retirement savings plans for low-wage and part-time workers by changing the minimum participation standards for long-term, part-time workers. Only 66 percent of women reported being offered a 401(k) or similar employee-funded retirement plan at work, while 28 percent said they worked part-time and were less likely to have workplace retirement benefits, according to a 2018 report.
“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,” Congresswoman Jan Schakowsky (D-Ill.) said in the statement. “The Women’s Retirement Protection Act takes crucial steps toward closing that gap.”
WRPA would improve “financial literacy” by increasing access to information about retirement and savings tools through informational links and grants to community-based organizations.
The legislation would also tackle qualified domestic relations orders (QDROs), the process during which retirement accounts and pensions are divided during a divorce. WRPA would give grants to community-based organizations that help women to obtain benefits they are entitled through QDROs but often lose due to high legal fees and expenses. According to the Transamerica Center for Retirement Studies, only 12 percent of women are “very confident” in their ability to fully retire with a comfortable lifestyle. Fifty-three percent of women plan to retire after the age of 65 or not retire at all.
“Women face greater longevity risk than men, due to their longer lives and the resulting need for more income,” said Linda Stone, a Women’s Institute for a Secure Retirement senior fellow, according to MarketWatch. “Social Security reports that, on average, women have nine years with zero earnings, and women’s careers average 29 years compared to 39 years for men.”
Because women often outlive their spouses, they are more likely to live alone, which increases the possibility of falling into poverty. Stone warned that many women also don’t understand why they should not cash out their retirement plan balances.
In a Squared Away blog, Kimberly Blanton, of the Boston College Center for Retirement Research, noted that women’s wealth gap surpassed the pay gap. Blanton referenced a 2018 report that showed the median net worth of women age 45 to 65, adjusted for inflation, had fallen in the last two decades. The report, which was conducted by the University of Pennsylvania’s School of Social Work and the nonprofit Asset Funders Network, found that older women of color experienced the biggest decline in their net worth.
It is unclear if WRPA will gain support from Republican members of Congress. The bill is co-sponsored by Representatives Suzanne Bonamici (D-Ore.) and Donald Norcross (D-N.J.) and is being headed by Washington State Senator Patty Murray. According to Congressional bill tracker GovTrack, the bill has a 4 percent chance of being enacted.
About the Author
Nicole Rojas is a breaking news writer for The North Star. She has published in various venues, including Newsweek, GlobalPost, IHS Jane’s Defence Weekly, and the Long Island Post. Nicole graduated from Boston University in 2012 with a degree in print journalism. She is an avid world traveler who recently explored Asia and Australia.