How Many Government Agencies Does it Take to Regulate a Retirement Plan?
Think administering loans and withdrawals is complicated now? New legislation introduced in the Senate claims to shore up retirement security for women — but it’s got implications for plan design and administration.
Senate Health, Education, Labor, and Pensions (HELP) Committee Ranking Member Patty Murray (D-Wash.) has introduced S. 2110, the Women’s Pension Protection Act of 2015
(WPPA), which she said would strengthen consumer protections to safeguard retirement savings, improve access to retirement savings plans for long-term, part-time workers — the majority of whom are women — and help increase women’s financial literacy.
There are, however, some complications.
For starters, the WPPA would extend the spousal consent protections to additional types of distributions from defined contribution plans, seeking to remedy the situation under current law, where one spouse could take a distribution or a loan from the plan without the other spouse’s knowledge or consent.
Oh, and the WPPA wants to bring the Consumer Financial Protection Bureau (CFPB) into the mix. According to American Retirement Association Director of Congressional Affairs Andrew Remo, the bill would require retirement plan service providers to provide a link to the CFPB in any offer for the sale of a retirement financial product or service. The bill also provides that the CFPB would provide “information and resources regarding retirement planning and/or retirement security.”
Additionally, according to a fact sheet
posted on Murray’s website, the WPPA would amend the minimum participation standards for long-term part-time workers, requiring employers to allow employees to participate in a plan once they have reached the earlier of the current minimum participation standards (age 21 or the completion of one year of service) or once they have completed at least 500 hours of service for three consecutive years.
The WPPA would also provide for grants through the Department of Labor to established community-based organizations to improve the financial literacy of women who are of working or retirement age.
Senate co-sponsors of the Women’s Pension Protection Act of 2015 include Sens. Kirsten Gillibrand (D-N.Y.), Claire McCaskill (D-Mo.), Jeanne Shaheen (D-N.H.), Barbara Mikulski (D-Md.), Maria Cantwell (D-Wash.), Tammy Baldwin (D-Wisc.), Debbie Stabenow (D-Mich.), and Amy Klobuchar (D-Minn.).
The bill is now before the HELP Committee for its consideration.