Strategies to Close America’s Retirement Savings Gap are Focus of Aging Committee Hearing
More than one in four households age 55 and older have no retirement savings or pension
Click HERE to read Senator Collins’ opening statement
Click HERE to read Senator Casey’s opening statement
Washington, D.C.—America is facing a retirement crisis. Over the past 40 years, fundamental changes to the ways people save for retirement have made it increasingly difficult for individuals to plan and manage their savings effectively. More than one in four households age 55 and older have no retirement savings or pension – and the Center for Retirement Research at Boston College estimates that half of working-age households may not be saving enough to maintain their standard of living in retirement.
U.S. Senators Susan Collins (R-ME) and Bob Casey (D-PA), the Chairman and Ranking Member of the Senate Aging Committee, held a hearing today to examine these challenges and discuss how to increase Americans’ retirement savings.
“For those living paycheck to paycheck, it can be difficult to cover the heating bill or to afford much-needed medications, much less save for the future. For many, saving for retirement seems out of the question,” Senator Collins said. “This is a significant public policy problem that requires bipartisan solutions. After spending decades in the workforce, seniors should be confident that they will have the money needed to pay their bills and enjoy their retirement, without fear that they will fall into poverty during their golden years.”
“All of us hope that when we reach old age, we will be able to enjoy retirement on our own terms. But the reality is that while our retirement system works well for some, it allows millions of Americans to fall through the cracks,” said Senator Casey. “Our nation deserves better, more secure retirement options. Congress can help increase financial security in retirement by strengthening Social Security , ensuring those with pensions don’t have their earned benefits cut and expanding access to workplace retirement plans. We must not let Americans slide into poverty in their golden years.”
Americans today face three key challenges when planning and managing their retirement: (1) accessing retirement plans through their employers; (2) accumulating enough retirement savings; and (3) ensuring their savings and benefits last through retirement.
Witnesses for the hearing included experts on retirement security, a business leader, and a volunteer for a nonprofit that helps women improve their financial wellbeing.
Gene Dodaro, the Comptroller General at the Government Accountability Office (GAO) in Washington, D.C., discussed a December 2017 report that found that it is getting harder for an increasing number of Americans to save enough to live comfortably in retirement. Mr. Dodaro also spoke about other projects GAO is working on at the request of the Committee, including a study on retirement savings of caregivers.
John Scott, a retirement security expert at PEW Charitable Trusts in Washington, D.C., explained the work that PEW is conducting to examine the challenges and opportunities small business owners face in helping their employees save for retirement. Mr. Scott noted that PEW’s research has revealed that small to midsize business owners see the benefits of multiple employer plans (MEPs).
Denis St. Peter, the President and CEO of CES, Inc., in Brewer, Maine, highlighted his company’s experience in providing retirement savings opportunities to its employees. Mr. St. Peter explained CES’ attempts to innovate and implement best practices to promote employee retirement savings, including establishing a matching plan, creating an investment committee, and educating their employees about retirement plans. As a result of CES’ efforts, the employee participation rate in the company’s retirement plan has increased from 62.3 percent to 89.5 percent.
Linda Stone, a volunteer fellow with the Women’s Institute for a Secure Retirement (WISER) in Bryn Mawr, Pennsylvania, testified about challenges women face saving for retirement, accessing retirement plans, and maximizing the benefits they have earned. Ms. Stone also explained the gaps many women fall through, and the need for improved financial education and strengthening programs that seniors rely on in retirement.
Click HERE to read the witnesses’ testimonies.