The Women’s Retirement Protection Act is back on Capitol Hill for a third time after being reintroduced on Aug. 8 by Senator Tammy Baldwin (D-WI), Senator Patty Murray (D-WA) and Representative Lauren Underwood (D-IL).
The bill first appeared in 2019, but died after not making it to the floor for a vote as the economy was thriving. It was reintroduced in July 2021, but again failed to gain traction. This time, Democratic sponsors are hoping that the bill’s promise to provide spousal protections similar to those that are available for defined benefit plans to defined contribution plans like a 401(k) will help push it over the finish line.
“Women in America face structural barriers to saving for retirement equally—from the gender pay gap, to the fact that women are more likely to work part-time, to complex rules and legal fees that prevent women from securing retirement resources after a divorce. This is a big problem because, just like investments, inequities compound over time.” said Senator Murray. “I’m proud to be reintroducing the Women’s Retirement Protection Act to help close the retirement gap and boost women’s financial security when they retire.”
The bill’s sponsors note that for many working families, a 401(k) plan is often their largest asset aside from their home. But under current law, one spouse could take a distribution or a loan from the plan without the other spouse’s knowledge or consent. The Women’s Retirement Protection Act would provide spousal protections to prevent this from happening.
“As women strive for economic equality in this country, we need to make sure they can retire with dignity,” said Representative Underwood. “That includes ensuring that a woman’s spouse cannot empty their shared retirement savings without her consent. Senator Baldwin and I introduced the Women’s Retirement Protection Act to address economic inequalities and help women achieve financial security and independence.”
In a press release announcing the reintroduction of the bill, the sponsors cited data showing women’s financial futures are consistently undermined by factors like unequal pay and time out of the workforce for caregiving duties, which make it more difficult to adequately save for retirement.
According to a 2020 report from the Government Accountability Office, they may also be prevented from securing the retirement resources they are entitled to following a divorce due to barriers like complex rules and legal fees. These factors can have a devastating impact on women’s ability to retire with dignity. Women, age 65 and older, are much more likely to live in poverty, compared to men in the same age group. In 2022, women’s median retirement income was 83% of men’s retirement income. And, according to the National Women’s Law Center, the average woman loses more than $400,000 over a 40-year career due to pay inequality, requiring women to work for almost a decade longer than their male counterparts to make up the gender wage gap.
“Every American who has put in a lifetime of hard work deserves the dignity of a stable retirement. Yet, that secure retirement is out of reach for too many women because of the systematic roadblocks like unequal pay, and time taken off work because caregiving responsibilities fall disproportionately on women,” said Senator Baldwin. “I’m proud to fight for families and women to ensure they have the resources and tools they need to retire with peace of mind and stability.”
Additional bill provisions, supporters
The Women’s Retirement Protection Act would also:
- Increase financial literacy: It would enhance and bolster women’s financial literacy by providing grants for community-based organizations to help provide information and financial tools to women who are of working or retirement age.
- Support low-income women and survivors of domestic abuse seeking retirement benefits: It would provide grants for community-based organizations that assist them in obtaining qualified domestic relations orders, the legal instruments that allow for the division of retirement benefits—assuring they receive the retirement benefits they are entitled to following a divorce or legal separation.
The Women’s Retirement Protection Act is also co-sponsored by Senators Maria Cantwell (D-WA), Catherine Cortez Masto (D-NV), Tammy Duckworth (D-IL), Dianne Feinstein (D-CA), Kirsten Gillibrand (D-NY), Mazie Hirono (D-HI), Amy Klobuchar (D-MN), Tina Smith (D-MN), Debbie Stabenow (D-MI), Elizabeth Warren (D-MA), Bernie Sanders (I-VT), Richard Blumenthal (D-CT), Bob Casey (D-PA), Tim Kaine (D-VA), Jeff Merkley (D-OR), and Ron Wyden (D-OR).
It is supported by the National Women’s Law Center, Pension Rights Center, AARP, and the National Committee to Preserve Social Security & Medicare.
“The Women’s Retirement Protection Act of 2023 would take important steps toward closing the retirement income gap that leaves women reaching retirement age with significantly fewer resources than men, which they must stretch over more years because of their longer life expectancies,” said Max Richtman, President & CEO of the National Committee to Preserve Social Security and Medicare.
“AARP has long supported efforts to protect and enhance retirement security for women. On top of the well-documented pay disparities, women are more likely than men to leave the workforce, sometimes for many years at a time, for family caregiving responsibilities, leaving women overall less financially secure in retirement than men,” said Bill Sweeney, Senior Vice President of Government Affairs at AARP. “Combined with the bill’s provisions to boost financial literacy among working and retired women, we believe this legislation will serve as an important tool in helping women across America better secure their financial future.”
A one-pager on the bill is available here. Full text of the legislation is available here.
SEE ALSO:
• Dems Reintroduce Bill to Protect Women’s Retirement Security
• Inflation Continues to Derail Women’s Retirement Savings in 2023
• 4 in 10 Women Won’t Retire Until Age 70—If At All
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.
