A bipartisan bill to strengthen workers' retirement security


Date: Feb. 28, 2022
Location: Washington, DC

According to a recent survey, more than half of all workers said they were behind on their retirement savings, while only 21% said they were on track. Older workers were particularly concerned they were not adequately prepared -- an especially concerning trend given how the pandemic drove more people to early retirement.

More than one-third of U.S. workers have never had a retirement account. A 2021 report by PriceWaterhouseCoopers found that a quarter of adults have no retirement savings, and only 36% feel their retirement savings are on track to meet their goals. The median amount of retirement savings among those 55-64 years old is only about $120,000. That means a person who earns $60,000 annually can count on that level of savings to last for about two to three years in retirement.

So it's clear millions could face a financial crisis during their retirement years. We can and should do something about this, but partisan politics have stood in the way of real progress.

Congress can help head off this avoidable emergency and give individuals, families, and businesses more tools to boost their retirement nest eggs. In fact, last May, the House Ways and Means Committee unanimously passed the bipartisan Securing a Strong Retirement Act of 2021, legislation filled with new incentives to help improve the retirement financial landscape for everyone.

Unfortunately, this bipartisan effort has since stalled in Congress. Speaker Nancy Pelosi has so far refused to bring it to the full House for a vote. Instead, Democrats in Congress have pursued a completely partisan agenda to placate their party's far left.

This bipartisan retirement savings bill seeks to build on the momentum from legislation that passed last Congress. It would double the existing tax credit for businesses with 50 or fewer employees that start a company retirement plan. That means a small business can get a dollar-for-dollar reimbursement for the costs associated with starting such a plan for its workers. It also provides these employers an additional credit for up to $1,000 of matching contributions they provide to their employees.

For employers who start new retirement plans, the bill also expands auto-enrollment (with an easy opt-out alternative for those that do not want to participate), a proven way to boost participation in retirement savings plans, with protections for those who don't want to enroll.

The legislation also reforms rules regarding when retirees are required to begin withdrawing money from their accounts. Current law requires distribution at 72 years of age. This bill would push back that requirement to 75 -- another easy way to make retirees' savings last longer as life expectancy increases. For those nearing retirement who need to increase their savings, the bill allows workers to double their catch-up contributions, from $5,000 to $10,000 per year.

Contributing to retirement accounts is also difficult for those who live paycheck to paycheck. For those paying off college loans, finding enough money to save for retirement can be particularly challenging. This is where employers can help. This bipartisan bill authorizes employer contributions to the retirement accounts of employees paying down student debt, making it easier to build their retirement savings.

We can also provide additional help and incentives to our veterans. The legislation authorizes new tax credits for small employers that make military spouses eligible for company-sponsored retirement plans.

Another common-sense step Congress should take immediately is to pass another bill I have proposed: the "Know Your Social Security Act." My bipartisan bill helps Americans plan for retirement by making it easier to access critical information about an individual's Social Security earnings, contributions, and future benefits.

My district in Southwest Florida is home to nearly 240,000 seniors, many of whom rely on Social Security as their primary source of income during retirement. The AARP has endorsed my bill and called these statements "vital" documents that will help adults "more effectively plan for retirement."

Retirement doesn't have to turn into another U.S. financial crisis. With responsible incentives and smart planning, we can give more people the peace of mind they deserve as they grow older. Now is the time for Congress to put aside the games and come together to enact bipartisan solutions and strengthen America's retirement security.

Vern Buchanan represents Florida's 16th District in the U.S. House and is the co-chairman of the bipartisan state delegation. He is also the second-most senior Republican on the House Ways and Means Committee.