The Senate has important retirement legislation before it
Proposed retirement bill says to working Americans: ‘We’ve got you’
With so much to worry about in the U.S. and across the world, it would be a great comfort to relieve working Americans of one of their greatest financial worries: having enough money for retirement.
A bipartisan bill, Securing a Strong Retirement Act of 2022 (SSRA), heading to the Senate aims to build on existing retirement legislation — The Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act) — and better prepare working Americans to live their best retirements.
The SECURE Act was big. It was bold. It made changes that helped businesses more easily offer workplace retirement plans. And, it was the first major retirement policy approved in over a decade.
Now, the Senate has a chance to build on that progress. We have enjoyed working with the Senate in the past and we are looking forward to working with lawmakers again as they consider and work through this important legislation.
It’s even more important now when working Americans are dealing with inflation, increasing interest rates and bigger tabs at the gas pump. It may feel, to some, that there is just no time or money to plan for their future.
The proposed SSRA offers a glimmer of hope and a steady oar in these rocky economic waves. It would provide even more security for working Americans, and it says: “We’ve got you.”
We believe the introduction and passage of the SSRA of 2022 would make a difference in the lives of many working Americans and further promote retirement security.
SSRA would expand automatic enrollment in retirement plans. We know that automatic enrollment in workplace retirement plans boosts participation. Americans today are saving an average of 8.2% of their salary in their workplace retirement plans.1 That’s up from 7.8% at the outset of the pandemic, according to Empower’s research of nearly 4 million of its plan participants.1
We know auto-enrollment works. These features have had a significant impact on improving retirement savings since they were first included in the Pension Protection Act of 2006. Our research shows that millennials 2— those who were born after 1981 and the first generation to benefit from these features — are on track to replace 75% of their income in retirement compared to Generation X workers who are on track to replace 61% and baby boomers who are on track to replace 58%.
Working Americans kicked off this year with conflicting feelings about their financial health. On the one hand, rising markets have given people more confidence in their investment accounts and retirement savings. But at the same time, fewer Americans are confident in the economy, their ability to meet financial goals or their overall financial state. In a recent Empower survey,2 about 40% of Americans reported confidence in the U.S. economy in Q4 2021, down from nearly 70% before COVID hit in the first quarter of 2020.
Lawmakers have a chance to ease some of that anxiety with legislation aimed at getting working Americans back on track with their financial goals.
What a great gift of security this legislation could give American workers. With this legislation, we would be saying that retirement planning and saving is for all workers, including those who work for small businesses. SSRA would encourage small employers to sponsor workplace retirement savings arrangements by providing tax credits to offset administrative expenses. And the bill aims to reduce the administrative burdens for all employers who sponsor retirement plans.
We believe small business owners are interested in providing workplace retirement plans. When we asked small business owners about retirement plan offerings, a majority of small-business decision-makers said, “it’s the right thing to do” as the top reason to offer a workplace plan to employees.3
It has been reported in various news publications that workplace retirement plans for employees can improve morale and retention, attract better and new hires for companies and provide companies tax benefits. All of that is fantastic. But at the heart of a workplace retirement plan is securing financial freedom.
At the end of 2021, about 34% of Americans said they feel very financially healthy, a 14 percentage-point drop from Q1 of 2021.4
This legislation could help get more working Americans back to feeling financially healthy and better prepared for their retirement.
At Empower, we are very passionate about retirement saving and we know government and private industry have made great strides in developing and shaping retirement polices that make saving for financial independence more accessible to working Americans.
There is more we can do. According to the American Retirement Association,5 more than 5 million employers in the United States still don’t offer a workplace retirement savings benefit. But we have a chance now to reverse that.
It’s time for us to let working Americans know: We’ve got them.
--Edmund F. Murphy III is President and CEO of Empower, the second-largest retirement plan recordkeeper6 serving more than 12.8 million retirement plan participants7 with over $1.1 trillion in plan assets.8
1 Empower analysis of 3.92 million active participants recordkept at Empower and 2,508 working Americans between the ages of 18 and 70 conducted from September 21 to October 11, 2021.
2 According to Empower's 2022 Wealth and Wellness Index, based on a survey of more than 2,000 American workers conducted at the end of 2021.
3 Empower Retirement Small Business Open-Multiple Employer Plan (MEP) research. Research conducted by Harris Insights and Analytics on behalf of Empower. 304 small business decision-makers completed an online survey. October 2018.
4 Empower and Personal Capital, “Wealth and Wellness Survey,” November 2021. Empower and Personal Capital, “Financial Well-being Survey,” April 2021.
5 According to 2019 state-by-state analysis published by the American Retirement Association,
6 Pension & Investments 2020 Defined Contribution Survey Ranking as of April 2021.
7 As of December 31, 2021.
8 As of December 31, 2021. Information refers to the business of Great-West Life & Annuity Insurance Company and its subsidiaries, including Great-West Life & Annuity Insurance Company of New York and GWFS Equities, Inc. GWLA’s consolidated total assets under administration (AUA) were $1,180B. AUA is a non-GAAP measure and does not reflect the financial stability or strength of a company. GWLA’s statutory assets total $75.9B and liabilities total $73.0B. GWLANY statutory assets total $4.1B and liabilities total $3.9B.
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