The end of America Saves Week (February 23-28, 2015) should not be an excuse to suspend our efforts to (1) save, (2) spread the word on the importance of saving for retirement and other purposes, and (3) continue working to remove barriers to saving. Low and inadequate retirement savings and/or lack of access to 401(k)s, pensions, and other savings platforms result in increased dependence and pressure on our Social Security system. This is a crucial issue for all Americans, but especially for women. WOW’s research shows that half of all women age 65 and older living independently in the community experience economic insecurity—with much higher percentages for women of color.
There have been efforts on both the national and state levels to address barriers to saving for retirement—with uneven results. For example:
- In response to data showing that “one third of people (36%) in the U.S. have nothing saved for retirement”, and “14% of people ages 65 and older have no retirement savings”, the US Department of Treasury launched the myRA savings program in December, 2014 –a no fee, no hidden cost account–intended to provide a “simple, safe, and affordable retirement savings option” for working Americans.
- In February 2015, President Obama announced that he had asked the Department of Labor to modernize its rules under ERISA to ensure that investment advisers do not offer financial advice tainted by conflict of interest, and that they put hardworking Americans’ interests first. It is estimated that $17 billion is lost each year due to conflicted investment advice.
- In January 2014, a bill was introduced in West Virginia’s legislature to establish the West Virginia Voluntary Employee Retirement Accounts (VERA) Program, which would expand access to retirement plans to all employees and employers who wish to participate. According to H. B. 4375 nearly fifty percent of West Virginia workers have no access to employer-based retirement plans. However, despite vigorous advocacy by West Virginia Center on Budget and Policy (WVCBP) and other groups, opposition led by the insurance industry prevailed and the legislation died.
- The Minnesota’s Women’s Economic Security Agenda (WESA), a multi-issue campaign mounted by the Minnesota Women’s Consortium—another WOW partner—and other advocates, resulted in legislation that included creation of a Minnesota Secure Choice Retirement Savings Plan. In February 2014, HF 2419 and its companion Senate bill, SF 2078, were introduced to establish such a plan; in the end, however, only a study of the issue was commissioned.
- In January 2015, Governor Pat Quinn signed into law a bill creating the Illinois Secure Choice Savings Program Act. The Act is intended to promote “greater retirement savings for private-sector employees in a convenient, low-cost, and portable manner.”
- In March 2012, Governor Deval Patrick of Massachusetts signed a bill into law that provides retirement options for nonprofit organizations. This new law’s effective date was January 1, 2014 and applies to the “not-for-profit employer “who employs “not more than 20 persons…”
Having access to retirement savings plans/programs during one’s working years, and being assured of non-biased investment advice by financial advisors can make a big impact on economic security in retirement. WOW commends and joins with those at the state and national levels who are working to bring these reforms about.