Workplace Savings Key to Boosting Women’s Retirement Security, Experts Tell Congressional Panel
The Joint Economic Committee, a bicameral congressional committee charged with studying matters relating to the United States economy, held a hearing May 21
that examined the unique issues that women face in retirement. Sen. Amy Klobuchar (D-Minn.), vice-chair of the committee, convened the hearing to follow up on a report the committee issued
in April which concluded that due to lower lifetime earnings, women age 65 and older collect $11,000 less in annual median income than men. The panel wanted to know what policy options should be considered in order to address this inequity.
Rep. Richard Hanna (R-N.Y.), in the opening remarks, captured the reason for the hearing: “Regrettably, women typically have lower lifetime earnings, however, have longer life expectancies than men. Women are also less likely to be covered by an employer pension program. As a result, they are at greater risk of falling into poverty during their retirement years. To improve the retirement security of women we must understand the nature and extent of the problem.”
Rachel Greszler, Senior Policy Analyst, Economics and Entitlements at the conservative-leaning Heritage Foundation’s Center for Data Analysis, and Debra Whitman, Executive Vice President, Policy, Strategy and International Affairs of the liberal-leaning AARP both endorsed the concept of requiring businesses to make workplace savings, like automatic payroll deduction IRAs, available to private employees.
Other witnesses included Dr. Brigitte Madrian, Aetna Professor of Public Policy and Corporate Management at Harvard’s Kennedy School of Government, and Women’s Institute for a Secure Retirement President Cindy Hounsell.
The consensus among the witnesses was that, since payroll deduction is the single most effective retirement savings vehicle, proposals that expand savings opportunities in the workplace would have the most impact on the retirement security of women.
The witnesses agreed that women generally face greater financial risk in retirement because they tend to live longer and earn less during their working careers. There was also a general recognition that women tend to move in and out of the workforce with more frequency then men, since women are typically the primary caregivers within the family unit.
Andrew Remo is ASPPA’s Congressional Affairs Manager.