We all know the impact felt by the passing of the Pension Protection Act of 2006. Will the Women’s Pension Protection Act of 2015 similarly resonate?
The retirement gender gap is as shocking as it is frightening. Despite living, on average, longer than men, women fall far short in retirement preparedness. In response, Rep. Jan Schakowsky, D-IL and Senator Patty Murray, D-WA, on Friday introduced H.R. 4235, The Women’s Pension Protection Act, which would improve spousal protections to 401 (k)s, making more long-term and part time workers eligible for retirement plans, and improving financial literacy. Among its provisions:
- Increases Spousal Protections: Spousal protections for benefit plans require married workers to get their spouse’s consent to take money of the couple’s retirement account. Currently spousal protections are only available for defined benefit plans but the WPPA would extend spousal protections to the growing category of defined contribution plans, which include 401(k)s.
- Improves Retirement Coverage for Long-Term Part-Time Workers: The WPPA would amend the current minimum participation standard, the completion of 1,000 hours during a 12-month period, for workers to participate in their employer’s retirement plan. Under the WPPA, workers who complete 500 hours of service for three consecutive years will be eligible to participate in their employer’s retirement plan.
- Creates Access to Consumer Information: The WPPA will require that, in any offer to sell a financial product or service, financial providers shall provide a link to the Consumer Financial Protection Bureau website with information relating to retirement planning or later life economic security.
- Awards Grants to Promote Financial Literacy for Women: The WPPA will award grants of at least $250,000 to community-based organizations to improve the financial literacy of women who are of working or retirement age.
“One of the many barriers that women in America face in the effort for full equality is access to a secure retirement,” Schakowsky said in a statement. “On average, women face a 26 percent gap in retirement savings compared to men, while also being much more likely to earn less than their male counterparts.”
The Women’s Pension Protection Act has been cosponsored by Reps. Rosa DeLauro, Lois Frankel, Raul Grijalva, Luis Gutierrez, Eleanor Holmes Norton, Doris O. Matsui, Carolyn B. Maloney and Chris Van Hollen.
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
