[Senate Hearing 112-591]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 112-591

 
                 ENHANCING WOMEN'S RETIREMENT SECURITY

=======================================================================

                                HEARING

                               BEFORE THE

                       SPECIAL COMMITTEE ON AGING

                          UNITED STATES SENATE

                      ONE HUNDRED TWELFTH CONGRESS


                             SECOND SESSION

                               __________

                             WASHINGTON, DC

                               __________

                             JULY 25, 2012

                               __________

                           Serial No. 112-21

         Printed for the use of the Special Committee on Aging


         Available via the World Wide Web: http://www.fdsys.gov



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                       SPECIAL COMMITTEE ON AGING

                     HERB KOHL, Wisconsin, Chairman

RON WYDEN, Oregon                    BOB CORKER, Tennessee
BILL NELSON, Florida                 SUSAN COLLINS, Maine
BOB CASEY, Pennsylvania              ORRIN HATCH, Utah
CLAIRE McCASKILL, Missouri           MARK KIRK III, Illinois
SHELDON WHITEHOUSE, Rhode Island     DEAN HELLER, Nevada
MARK UDALL, Colorado                 JERRY MORAN, Kansas
MICHAEL BENNET, Colorado             RONALD H. JOHNSON, Wisconsin
KIRSTEN GILLIBRAND, New York         RICHARD SHELBY, Alabama
JOE MANCHIN III, West Virginia       LINDSEY GRAHAM, South Carolina
RICHARD BLUMENTHAL, Connecticut      SAXBY CHAMBLISS, Georgia
                              ----------                              
                 Chad Metzler, Majority Staff Director
             Michael Bassett, Ranking Member Staff Director


                                CONTENTS

                              ----------                              

                                                                   Page

Opening Statement of Senator Herb Kohl...........................     1
Statement of Senator Bob Corker..................................     2

                           PANEL OF WITNESSES

Barbara D. Bovbjerg, Managing Director, Education, Workforce, and 
  Income Security Issues, Government Accountability Office, 
  Washington, DC.................................................     3
LaTina Burse Greene, Assistant Deputy Commissioner for Retirement 
  and Disability Policy, Social Security Administration, 
  Baltimore, MD..................................................     5
Kelly O'Donnell, Vice President, Financial Engines, Boston, MA...     6
Sabrina L. Schaeffer, Executive Director, Independent Women's 
  Forum, Washington, DC..........................................     8
Joan Entmacher, Vice President and Director, Family Economic 
  Survey, National Women's Law Center, Washington, DC............    10

                                APPENDIX
                   Witness Statements for the Record

Barbara Bovbjerg, Managing Director, Education, Workforce, and 
  Income Security Issues, U.S. Government Accountability Office, 
  Washington, DC.................................................    24
LaTina Burse Greene, Assistant Deputy Commissioner, Retirement 
  and Disability Policy, Social Security Administration, 
  Baltimore, MD..................................................    36
Kelly O'Donnell, Vice President, Financial Engines, Boston, MA...    45
Sabrina Schaeffer, Executive Director, Independent Women's Forum, 
  Washington, DC.................................................    50
Joan Entmacher, Vice President and Director, Family Economic 
  Security, National Women's Law Center, Washington, DC..........    55

           Additional Information by Witnesses for the Record

``Retirement Security: Women Still Face Challenges,'' U.S. 
  Government Accountability Office...............................    66
``Trends in Early Benefit Claiming,'' Social Security 
  Administration.................................................   162
Letter regarding long-term care employment, National Women's Law 
  Center.........................................................   166

             Additional Statements Submitted for the Record

American Council of Life Insurers, Washington, DC................   167
Employee Benefit Research Institute, Washington, DC..............   174
Human Rights Campaign, New York, NY..............................   184


                 ENHANCING WOMEN'S RETIREMENT SECURITY

                              ----------                              


                        WEDNESDAY, JULY 25, 2012

                                       U.S. Senate,
                                Special Committee on Aging,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 2:04 p.m., in 
Room SD-562, Dirksen Senate Office Building, Hon. Herb Kohl, 
chairman of the committee, presiding.
    Present: Senators Kohl [presiding], Blumenthal, and Corker.

        OPENING STATEMENT OF SENATOR HERB KOHL, CHAIRMAN

    The Chairman. Good afternoon, everybody. We'd like to thank 
our witnesses and welcome all the rest of you to today's 
hearing. Today we are here to examine the challenges women face 
in working to achieve retirement security. In 2010, women over 
65 were nearly twice as likely to live in poverty as men. 
Reasons for this are many. On average, women live longer than 
men, they make less money than men, and they are more likely to 
move in and out of the workforce to care for family members, 
which reduces their opportunities to contribute to a pension 
plan or Social Security.
    This committee asked the Government Accountability Office 
and other interested parties to explore this problem and 
recommend ways to reduce the risk many women have of outliving 
their savings and falling into poverty. The most popular answer 
involved improving Social Security benefits, which women 
disproportionately depend on for their retirement income. This 
means that as Congress addresses Social Security's pending 
insolvency, we must also work to modernize the program to 
ensure it remains a safety net for those most in need.
    The GAO report explores many of these options and we'll 
hear from several witnesses about possible changes. One 
bipartisan solution that should be included in any reform 
package is to enhance the special minimum benefit. This can be 
done at a reasonable cost and it would help ensure that career 
low wage earners who have little opportunity to save on their 
own can avoid being stuck in poverty throughout their 
retirements.
    But what about women who are close to retirement now? For 
them, the GAO report recommends one decision that many perhaps 
do not even consider, namely waiting to claim these retirement 
benefits. Deciding when to take Social Security benefits is one 
of the most important financial decisions a person can or will 
make in retirement.
    Currently the majority of women claim benefits at 62, the 
earliest age possible. Only 18 percent wait until their normal 
retirement age of 66 or later. This option is not for everyone. 
Some have health concerns and others may be unemployed or have 
very little money that they've saved. However, if you can delay 
and you don't, you will be leaving a lot of money on the table. 
A woman who might be expected to get $1,000 a month at 66 gives 
up $250 every month for the rest of her life if she files to 
take the benefits, not at 66, but at 62.
    On the other hand, if she waits until she's 70, then she'll 
be looking at a monthly benefit of $1320. That would be an 
additional $570 for the rest of her life if she delays her 
benefit from 62 to 70. A recent study from the Center for 
Retirement Research called this strategy to delay benefits 
``the best deal in town.''
    SSA has a responsibility to educate people about their 
options and it needs to make sure people understand just how 
much money they are losing when they take their benefits sooner 
rather than later. We'll be asking SSA today about its approach 
and its overall efforts to educate the public about their 
options.
    We thank you all again for being here. We'd like to give a 
special thank-you to the various aging and women's 
organizations that have been sharing their insights with our 
committee on ways to improve women's retirement security.
    We turn now to the ranking member, Senator Corker, for his 
remarks.

                STATEMENT OF SENATOR BOB CORKER

    Senator Corker. Thank you, Mr. Chairman, for calling this 
hearing, and to all of you as witnesses for being here.
    I do think it's a very, very important issue. As I travel 
around the country and my own State, I worry about people being 
prepared for retirement, especially women, who in many cases, 
for lots of reasons, haven't focused as much on it as should be 
the case.
    I think we're going to have an opportunity, Mr. Chairman, 
to deal with this special minimum benefit, I really do, and I 
think there is bipartisan support for something like that, and 
I appreciate your bringing it up. I hope as part of any 
package, budget package or fiscal reform package that we deal 
with over the course of the next six months, year and a half--I 
hope it's on the front end of that--I do think that Social 
Security reform should be a part of that and hopefully will be 
a part of that. And my sense is the special minimum benefit 
that you're talking about very much should be a part of that 
also. So I appreciate your bringing that up.
    One of the most responsible things that we could do here is 
actually do those things to make Social Security solvent for 
the long haul. But I think making people aware of the options 
that exist and certainly the ones you pointed out about 
deferral until a later age, but also hopefully causing people 
throughout our society, in this case especially women, to focus 
on the standard of living that one's going to have without 
focusing on this, and hopefully moving people towards this 
particular issue.
    So I thank you very much. I've got--we've got a little 
LIBOR issue that's cropped up over the last couple weeks and 
I've got a conflict with one of my other committee 
responsibilities and I will not be here for the entire hearing, 
but our committee staff is here. We thank you for being here. 
We certainly have read your testimony or will read portions 
that we haven't seen yet. Again, thank you.
    The Chairman. Thank you. Thank you, Senator Corker.
    Introducing our witnesses, the first witness today will be 
Barbara Bovbjerg, Managing Director of Education, Workforce, 
and Income Security Issues at the U.S. Government 
Accountability Office.
    Next we'll be hearing from LaTina Burse Green, Assistant 
Deputy Commissioner in the Social Security Administration 
Office of Retirement and Disability Policy.
    Then we'll be hearing from Kelly O'Donnell, Vice President 
of Financial Engines, the Nation's largest registered 
investment adviser, helping more than 600,000 workers manage 
their 401(k) accounts.
    Next we'll be hearing from Sabrina Schaeffer, Executive 
Director at the Independent Women's Forum, a nonprofit aimed at 
promoting limited government and free markets.
    Finally, we'll be hearing from Joan Entmacher, Vice 
President for Family Economic Security at the National Women's 
Law Center. She directs the nonprofit's program to improve 
policies affecting the economic security of low income women.
    Thank you all for being here. Barbara, we'll start with 
you.

STATEMENT OF BARBARA D. BOVBJERG, MANAGING DIRECTOR, EDUCATION, 
       WORKFORCE, AND INCOME SECURITY ISSUES, GOVERNMENT 
             ACCOUNTABILITY OFFICE, WASHINGTON, DC

    Ms. Bovbjerg. Thank you, Mr. Chairman, Senator Corker. I'm 
pleased to be here today to discuss the challenges women face 
in attaining a secure retirement. I'm especially pleased to be 
here in advance of your own retirement, Mr. Chairman, later 
this year so that I can thank you for your leadership on issues 
affecting older Americans. This committee has achieved a great 
deal under your leadership----
    The Chairman. Thank you.
    Ms. Bovbjerg [continuing]. And we'll miss you.
    The Chairman. Thank you.
    Ms. Bovbjerg. My testimony today will present the results 
of our work for this committee on women's retirement security. 
Our analysis examines four aspects of the topic: women's access 
to and participation in employer-sponsored pensions; the 
retirement income women receive and its sources; how later in 
life events may affect women's retirement; and the policy 
options available to help. Our report, which is being released 
today, uses a variety of Federal data sources and models that 
we developed.
    First, women's access to pensions. Over the last decade, 
working women's access to and participation in employer-
sponsored pension plans improved. In fact, women even surpassed 
men in their likelihood of working for an employer who offers 
such benefits, although this results in part from a 
simultaneous decline in men's pension coverage.
    Despite women's greater likelihood of having access to a 
pension, they were slightly less likely than men to participate 
in such plans, although the gap between men's and women's 
participation has narrowed. Differences in men's and women's 
earnings are thought to play a significant role in these 
continuing participation disparities.
    As for women's retirement income levels and composition, in 
the last ten years women age 65 and over consistently had less 
retirement income and higher poverty rates than men. Groups of 
the lowest median incomes and highest poverty rates included 
single women, women over the age of 80, and non-white women. 
Still, the composition of women's retirement income has been 
fairly stable, largely because women are likely to receive 
income from Social Security and from defined benefit pension 
plans, and these have been shielded from market fluctuations. 
Although stability is a good thing, in the end women still have 
significant fewer resources later in life than men.
    So let me now turn to late in life events and their 
differential effects on men and women. Divorce, the death of a 
spouse, health decline, and unemployment all had detrimental 
effects on wealth and income for both men and women nearing or 
in retirement. Divorce and widowhood, however, have more 
pronounced effects on women. Our analysis shows that after 
divorce or separation, women's household income fell by 41 
percent on average, almost twice the 23 percent decline for men 
in the same situation. Widowhood has a similar disparity, with 
women's income falling by 37 percent and men's by 22 percent.
    What options are available to address these disparities? 
Well, experts we interviewed identified 22 policy options that 
could address some of the challenges older women face. 
Generally, these included tax incentives to save, improved 
Social Security benefits, strengthened spousal protections, and 
encouragement to save longer and retire later, among other 
strategies.
    But these options bring difficult choices. For one, all 
have cost implications that would need to be considered, and 
many of those costs would fall on the Federal Government, 
although some are also spread across workers and their 
employers. Although all the options would aid women in 
retirement, many would aid men as well by focusing on income 
security more than on gender, which is not a bad thing.
    Retirement security continues to be a national dilemma that 
by and large transcends gender. Recent economic volatility, 
coupled with the continued shift toward defined contribution 
plans, exposes all workers to more financial risk than in 
previous generations. And women's gains relative to men were 
aided in part by men's loss of retirement security over the 
last several years. So clearly this is a problem for all 
Americans.
    But our work highlights that women face a unique set of 
circumstances that warrant special attention. In particular, 
divorce or widowhood occurring late in life can be 
disproportionately devastating to women's retirement security. 
Efforts to improve retirement prospects for women will almost 
necessarily need to focus on a response to such events. Our 
work offers various options that could help address this 
problem, a problem that will become increasingly urgent in our 
aging society.
    That concludes my testimony. I'd be happy to answer any 
questions you have.
    The Chairman. Thank you very much.
    LaTina Burse Greene.

STATEMENT OF LATINA BURSE GREENE, ASSISTANT DEPUTY COMMISSIONER 
     FOR RETIREMENT AND DISABILITY POLICY, SOCIAL SECURITY 
                 ADMINISTRATION, BALTIMORE, MD

    Ms. Burse Greene. Chairman Kohl, Ranking Member Corker, and 
members of the committee: I appreciate this opportunity to 
speak to you about the importance of the Social Security 
retirement decision and how it affects women. We take our 
responsibility to provide complete, relevant, and 
understandable information about benefit options very 
seriously. Our role is to help ensure that the American people 
have the information they need to make informed decisions about 
retirement.
    Social Security is particularly important to women for 
several reasons, as you've already mentioned. First, women tend 
to live longer than men. Second, they generally have lower 
lifetime earnings. And third, women often retire with smaller 
income from other retirement programs and personal savings.
    Although individuals with identical earning histories 
receive the same benefits, some elements of our program are 
specifically helpful for women. For example, the Social 
Security benefit formula helps women because it is structured 
to more fully replace the earnings of lower wage earners. 
Women's greater life expectancy makes the automatic cost of 
living adjustment especially important.
    Our program also provides benefits for family members of 
retired, disabled, and deceased workers. Thus, in addition to 
benefits as a retired or disabled worker, women may receive 
higher benefits as a spouse, divorced spouse, or widow due to 
their lower lifetime earnings.
    Choosing when to retire will determine the amount of Social 
Security benefits a person will receive for the rest of his or 
her life and also can affect the benefits paid to his or her 
spouse. Our policy is to provide complete and accurate 
information--not advice--to assist claimants with making a 
personal decision on when to retire without influencing them in 
any particular direction. Regardless of how a person chooses to 
file for retirement, be it face to face, telephone, or 
Internet, we offer the same pertinent information. We provide 
information about the monthly benefit amounts payable at 
various ages, such as the earliest possible month of 
entitlement, at age 62, at full-retirement age, at age 70, or 
any other age the person requests. We inform them how earnings 
can affect their benefits. We also explain other benefits that 
may be available, such as benefits that could be payable to a 
spouse or to a child.
    When people ask us, what is the best age to start receiving 
retirement benefits, we tell them there is no ``single best 
age'' and that ultimately it is their choice. It is a personal 
decision that should be based on a number of factors, such as 
their cash needs, their health and family longevity, whether 
they plan to earn employment income in retirement, whether they 
have other retirement income, whether others are financially 
dependent on them, and of course the amounts of their future 
Social Security benefits.
    We are proud of the online tools we have developed to help 
people navigate the complexities of their retirement decision. 
The Social Security Statement, available online since May 1st, 
provides projections and estimates of retirement, disability, 
and family and survivor benefits. Our retirement estimator is a 
calculator that provides immediate and personalized retirement 
benefit estimates. Our life expectancy calculator is another 
simple but important tool to assist the public with retirement 
planning.
    We also make available a number of print resources aimed at 
helping women with their Social Security decisions, including a 
fact sheet entitled ``Social Security Is Important to Women.'' 
Publications such as ``What Every Woman Should Know'' and 
``Understanding the Benefits'' are also available. These 
publications are available through our 800 number, in our field 
offices, and can also be downloaded from our web page at 
www.socialsecurity.gov/women.
    Our financial literacy, retirement security, and education 
initiatives to encourage saving are useful to women who are 
planning for retirement now. We participate in pre-retirement 
seminars and other forms to provide information targeted 
towards women. For example, this coming Saturday we will be 
participating in a public program in Chicago hosted by the 
Department of Labor that will include panel discussions on how 
women can better manage and protect retirement savings and what 
to look for in the retirement marketplace. We will continue to 
help the public make well-informed retirement decisions.
    In closing, Chairman Kohl, we are especially grateful for 
your leadership and your many years of support of our program. 
Thank you again for inviting me to testify today and I look 
forward to answering any questions you may have.
    The Chairman. Thank you very much.
    Kelly O'Donnell.

    STATEMENT OF KELLY O'DONNELL, VICE PRESIDENT, FINANCIAL 
                      ENGINES, BOSTON, MA

    Ms. O'Donnell. Good afternoon. I'd like to thank the Senate 
Special Committee on Aging for this opportunity to provide 
testimony. My name is Kelly O'Donnell and I am a Vice President 
at Financial Engines. Co-founded in 1996 by Nobel Laureate Bill 
Sharpe, Financial Engines works with America's leading 
employers and retirement plan providers to make retirement help 
available to over 8 million 401(k) plan participants. We are 
not a fund manager, nor do we offer any investment products. We 
are an independent provider of investment advice and 
discretionary asset management services.
    The median 401(k) account balance we serve is $41,000. Our 
newest offering, Income+, helps retirees turn their 401(k) 
account into flexible but steady payouts that can last for 
life.
    Women and retirement security is a very personal topic for 
me. My father unexpectedly passed away last November and 
helping my mother plan for steady income for the rest of her 
life has been complex and challenging, even for a financial 
professional like myself.
    In my testimony today, I will focus on three key points: 
First, helping individuals, especially women, maximize their 
income in retirement is imperative. For most individuals, it is 
hard enough to save and invest in the years before retirement. 
It is even more difficult to know how to draw down the assets 
so you don't run out of money in retirement. Employers are 
slowly beginning to offer retirement income solutions within 
401(k) plans to help. The range of 401(k) income solutions 
available today includes annuities as well as managed account 
services, such as Income+. Exhibit 1 provides an overview of 
these solutions and their utilization.
    We developed Income+ to help all individuals, but the 
biggest need is among women. Not only are life expectancies 
longer for women, but women typically have accumulated much 
less when they reach retirement age. Among our clients age 60 
or older, the median 401(k) account balance for men is $82,000, 
yet only $46,000 for women. Clearly, more needs to be done to 
help women. Income solutions that merely annuitize retirement 
accounts will not be sufficient.
    My second point is that for women the financial impact from 
optimal Social Security decisions can exceed 401(k) savings. 
Women uniquely benefit from good Social Security decisions 
since life expectancy for women is greater than for men. When 
claiming is maximized, it can significantly increase the amount 
of income a woman will have in retirement. For married women, 
optimal household Social Security strategies result in a much 
higher benefit for the surviving spouse, in some cases 76 
percent higher. Since the surviving spouse is more likely to be 
a woman, maximizing Social Security plays a major role in 
creating income security for women. Based on our analyses, 
optimal Social Security decisions can in many cases create more 
retirement income wealth than a woman has accumulated in her 
401(k) account.
    My last point is deferring Social Security is often the 
best way to make a big impact with a small 401(k). However, for 
women to realize these benefits they need more help. Employer 
involvement is critical. The challenges in getting individuals 
to defer Social Security are formidable. There are awareness 
and behavioral challenges, and figuring out an optimal strategy 
is complicated and personal.
    However, deferral challenges can be overcome if there is 
help with how to use a 401(k) or IRA as an income bridge. For 
many, this may be the best use of a small retirement account. I 
have been involved personally in testing with employers and 
participants the application of Income+ so that 401(k) payouts 
are higher in the early years of retirement, thereby allowing 
Social Security deferral. We are very encouraged at the 
reaction we are getting from both groups.
    Employers are crucial to bringing this type of help to the 
broadest number of people. Aside from Social Security, 401(k) 
plans represent the largest source of potential retirement 
income for millions of American workers. The scale economics of 
401(k) plans make it not only possible to bring institutionally 
priced products and advice to participants, but also sponsors' 
fiduciary oversight to help ensure participant interests are 
protected.
    In conclusion, we urge more to be done to encourage 
employers to provide retirement income help, including help 
with Social Security strategies, for their employees. Every day 
tens of thousands retire. More than half are women. Most over 
62 will start taking Social Security within two months of 
leaving the workforce, a decision that is irrevocable. Women 
stand the most to gain by better Social Security decisions and 
more help with maximizing their retirement accounts.
    I would like to once again thank the committee for this 
opportunity to provide testimony.
    The Chairman. Thank you very much.
    Sabrina Schaeffer.

    STATEMENT OF SABRINA L. SCHAEFFER, EXECUTIVE DIRECTOR, 
           INDEPENDENT WOMEN'S FORUM, WASHINGTON, DC

    Ms. Schaeffer. Thank you, Chairman Kohl and Senator Corker. 
I appreciate you reaching out to the Independent Women's Forum 
and inviting me today to appear before you to testify on an 
issue that is so important to the country and so critical to 
both men and women. I'm Sabrina Schaeffer, the Executive 
Director of the Independent Women's Forum, the only women's 
think tank focused entirely on economic liberty. Our mission is 
to expand the number of women who understand and value the 
benefits of limited government, free markets, and personal 
responsibility.
    My interest in Social Security stems from research I 
conducted in graduate school at the University of Virginia and 
has continued throughout the last 12 years I've been here in 
Washington.
    I think we all agree that we need to make certain that any 
new system that is put in place preserves Social Security's 
promise and protects the most vulnerable members of society, 
many of whom are women. Clearly that means protecting the 
benefits of current seniors and those approaching retirement. 
It also means protecting the benefits of low income workers so 
that Social Security fulfills its promise of keeping seniors 
out of poverty.
    But we need to think seriously not only about how the 
system will affect those of us working today, but also how it 
will impact the workers of tomorrow. Today I want to discuss 
some of the problems with the current system, specifically the 
challenges it poses for women.
    Women are a particularly disadvantaged group as a result of 
the program's antiquated defined benefit system. The fact is 
Social Security's benefits structure has remained largely 
unchanged since it was established in 1935, but the same, of 
course, cannot be said for women's role in society. Social 
Security's benefit formula is a relic of an era when many more 
Americans were part of a traditional single-earner family in 
which the husband was the breadwinner and women worked solely 
within the home. Today, however, a minority of Americans lives 
in this family structure. Most women, married and unmarried, 
work outside the home. Many women are putting off marriage and 
childbearing until much later in life. Others never marry and 
divorce, unfortunately, is far more common.
    At its core, the current benefit structure remains highly 
regressive. As a result, many women lose out under Social 
Security's calculations. Consider, for instance, the problem of 
the outdated dual-entitlement rule. The architects of Social 
Security designed the program so that at the time of retirement 
the spouse with the lower lifetime earnings, usually the wife, 
would receive either a benefit equal to her own earnings or 
half of her spouse's benefits. At a time when far fewer women 
worked outside of the home, this may have made sense, but today 
this means that the stay-at-home spouses who are not 
contributing financially to Social Security are benefiting at 
the expense of women working outside of the home, who continue 
to be required to pay Social Security taxes but don't 
necessarily receive any additional benefits.
    In 1935 divorce was far less common than it is today. 
Still, the structure of the program has not kept pace. Divorced 
women then and now must have been married for ten years in 
order to receive Social Security benefits based on their former 
husband's earnings. Again, this may have seemed generous in the 
1930s, but today millions of women who find themselves in bad 
marriages are penalized by this policy.
    Social Security also fails many single women. A single mom, 
for example, who has paid Social Security taxes her whole life 
will leave her adult children only Social Security's paltry 
$255 death benefit. So her years of work and thousands put into 
the system will have been for nothing.
    Single working women and men without children who die 
prematurely receive the harshest punishment of all: The state 
reclaims all of their contributions to Social Security without 
the option to leave savings to other relatives, friends, or 
charity.
    So at a time when women outperform men academically, are 
soaring to the top of nearly every professional arena, and are 
increasingly becoming the breadwinners, we need to recognize 
that the antiquated view of Social Security is not the best we 
can do for women, and the fact is gender imbalance is a serious 
liability of the current system.
    Where IWF differs from many other women's organizations is 
that the solution for women is not more wealth distribution. 
Rather, women need a retirement plan that reflects the changing 
roles of women and the American family in the 21st century. 
There are several different options for helping to make the 
current system sustainable, but making the current Social 
Security system sustainable shouldn't be the only goal of 
reform. Ultimately, policymakers must consider how to move 
toward a system that allows people, both men and women, to save 
and invest on their own and gives them the greatest 
flexibility.
    It's wonderful to hear what's happening in the private 
sector to help individuals save for retirement. When it comes 
to the Social Security system, I think individual retirement 
accounts are still one more way that we may consider how men 
and women can own and control their savings, bringing much 
higher rates of return that they can pass on to family or to 
charity.
    In the end, it's important to remember that women want what 
we all want today, the freedom to save and invest in a way that 
reflects the needs of their individual family and plans for the 
future.
    The Chairman. Thank you very much.
    Joan Entmacher.

   STATEMENT OF JOAN ENTMACHER, VICE PRESIDENT AND DIRECTOR, 
     FAMILY ECONOMIC SURVEY, NATIONAL WOMEN'S LAW CENTER, 
                         WASHINGTON, DC

    Ms. Entmacher. Chairman Kohl, thank you for inviting me to 
testify on behalf of the National Women's Law Center and for 
your leadership throughout the years on issues affecting older 
women. It's a pleasure to have the opportunity to talk about 
ways to make Social Security, the foundation of women's 
retirement security, even better.
    But before I talk about possible enhancements, I would say: 
First, do no harm. It's disturbing that Social Security is on 
the table in deficit reduction talks and that cuts have been 
proposed to benefits that average just $12,100 a year for women 
65 and older. The Bowles-Simpson plan, for example, includes 
three painful cuts to Social Security. It would reduce the 
annual cost of living adjustment by switching to the chained 
CPI. A COLA cut gets deeper every year, so it hits women, who 
generally live longer, harder. It would raise the retirement 
age to 69 and every year added to the retirement age represents 
a 7 percent across-the-board benefit cut. Third, it would 
change the benefit formula. The formula cuts would be deepest 
for middle and upper income workers, so they've sometimes been 
called progressive, but in fact they would affect workers with 
average earnings as low as $10,000 a year.
    Now for improvements. I'll be outlining four proposals to 
enhance Social Security. I'll also talk about reforms to 
Supplemental Security Income, SSI, our existing safety net 
program for poor elders that is in desperate need of 
modernization.
    One important Social Security reform is to improve the 
special minimum benefit. I was delighted to hear the bipartisan 
interest in that benefit improvement. I would simply point to 
my written testimony, which identifies specific ways of doing 
that, but add this caution, that if that improvement is simply 
a way to mitigate cuts such as those that are in some plans 
like the Bowles-Simpson plan, it might end up mitigating the 
harm, but not really making people better off, which should be 
the goal of enhancing this benefit.
    Second, provide credit for caregiving. As you've mentioned, 
as have other witnesses, women are still more likely to take 
time out of the labor force for caregiving. Social Security 
doesn't directly credit those years. It recognizes it only 
indirectly through the benefits for wives and widows, and 
that's an imperfect way of doing it. So one proposal would give 
workers up to five years of credit for caregiving, computed at 
50 percent of the average wage.
    Third, create an alternative benefit for widows and 
widowers. Make it equal to 75 percent of the couple's combined 
worker benefits, instead of simply the higher benefit of 
either. This would improve both the adequacy of benefits for a 
surviving spouse and the equity of benefits between single-
earner and dual-earner couples. It could be capped to target 
the proposal to low and moderate income earners and reduce the 
cost.
    Fourth, use the Consumer Price Index for the Elderly to 
determine the COLA for Social Security and SSI. The CPI-E is a 
more accurate measure of inflation for the elderly because it 
takes account of their spending patterns, which are twice as 
high on health care costs, where inflation is much higher than 
for costs generally.
    Because of the focus of this hearing, I've highlighted 
improvements to Social Security retirement benefits that are 
especially important for women. But a complete reform package 
should consider other issues, such as improving benefits for 
people with disabilities, restoring and improving the student 
benefit, ending discrimination against same-sex couples, and 
increasing benefits broadly to improve retirement security for 
many Americans who have increased--are at increased risk.
    Finally, turning to SSI, this means-tested program provides 
basic income support to the elderly poor and children and 
adults with disabilities. Two-thirds of all SSI beneficiaries 
65 and older are women. Congress needs to consider SSI when it 
thinks about retirement security for women to ensure that the 
poorest beneficiaries, who get benefits from both programs, 
actually are made better off by improvements to Social Security 
benefits and are not made worse off because they lose Medicaid 
eligibility.
    More generally, SSI urgently needs to be updated. For 
example, it includes a $20 a month disregard for Social 
Security benefits. This means that for every dollar in Social 
Security benefits above $20 a month, they lose a dollar in SSI 
benefits. This $20 disregard has not been changed in the 40 
years since SSI was created. People are ineligible for SSI if 
they have more than $2,000 in assets for an individual or 
$3,000 for a couple. This limit is nearly 30 years old.
    Since Social Security was created 75 years ago, it's been 
improved several times by Congress to make it better for women. 
I'm glad this committee is considering continuing that proud 
tradition, and thank you again for this opportunity to testify.
    The Chairman. Thank you very much.
    Ms. Entmacher. Thank you.
    The Chairman. We'll start with you, Ms. Bovbjerg. You 
recommend in your report that SSA educate people about the 
advantages of waiting to file for benefits. But are there 
people for whom waiting is a bad idea? What is the benefit for 
the rest of the population?
    Ms. Bovbjerg. We've reported in earlier work that we've 
done that many, many people would benefit from waiting, from 
delaying claiming for Social Security benefits, particularly in 
the context that we're speaking about today. Single women would 
benefit tremendously. We don't think they always know that this 
is something they should do.
    If people are in ill health, which does affect a 
significant percentage of people over 65, they might want to 
claim early because they think that they won't live long enough 
to benefit from the increased benefit earned by waiting until 
age 70. People who are low earner spouses might not benefit as 
much. But nearly everyone else does and should at least 
consider it.
    A concern that we have had for quite some time is that the 
government does not speak with one voice on the advantages of 
working longer and claiming later, and we've spoken about this 
frequently before this committee. We've made recommendations 
that the government should think more generally about the 
signals that we send. For example, we have different claiming 
and eligibility ages for different programs--Medicare, Social 
Security, pension withdrawal requirements. But if you really 
look at Social Security, which has the biggest platform in some 
ways, Social Security does have an opportunity to get the word 
out to people, make the information more readily available. We 
think that if we frame the issue perhaps a little differently 
so that it's more focused on age 70 and less on the so-called 
full retirement age, that that could make a difference.
    I think it would also be important that Social Security 
consider what do they want to say, how are they going to say 
it, and how can it be said consistently across field offices, 
800 number operators, and the web site, where people are 
increasingly claiming electronically. We think these things 
would go a long way.
    If I could, just while I have the floor for a minute, I 
just would like to talk about the importance of the opportunity 
of the Social Security statement, which is a way that we once 
reached every American over the age of 25. And now we are only 
sending to people over age 60 and people when they turn 25, on 
or around their birthday. Others can obtain it on line, but 
many people won't do that. That is an opportunity to educate 
people.
    We have called in the past for a redesign of the statement 
to make it more accessible to people and to really explain some 
of these things more clearly; we also believe that it should be 
more widely available, and we're saddened that it's not. We 
think it's an opportunity that's being lost.
    The Chairman. Thank you so much.
    LaTina Greene, we've heard from GAO and many people are 
asking the question, and I'm sure you can provide some cogent 
observations, why doesn't SSA do more to educate people about 
the consequences of delaying benefits? You state and we 
recognize that you don't want to be people's financial 
advisers. But for many people, especially those who depend 
largely on Social Security, SSA is where they get the 
information. Don't you feel that you, we, the country, owes it 
to these people to at least be certain that they are fully 
familiar with the ramifications of beginning the benefits at 62 
or 66 or 70?
    Ms. Burse Greene. Absolutely we agree, absolutely. I don't 
think that there is a disagreement there. Our position is that, 
regardless of the service channel that a claimant chooses to 
file for retirement benefits, we provide the same information 
to them. We provide them information as to their monthly 
benefit amounts at age 70, at the full retirement age, at age 
62, at their earliest month of entitlement, or at any other 
month they choose.
    We make them aware of the fact that if they decide to claim 
early, they will have a reduction of between 25 and 30 percent 
of the benefit that they would be entitled to at full-
retirement age. We explain to them that if, in fact, they delay 
retirement after the full retirement age, that they will 
receive an 8 percent increase in their monthly benefit amount 
each year thereafter. We explain to them exactly how earnings 
will affect their benefits and how their personal decision will 
affect their spouses and their surviving spouses and so forth.
    So I think that, regardless of the service channel, we 
provide all of that relevant information. We have publications 
available online. We have various calculators and tools 
available online for them to be able to make informed 
decisions, might I add very personal decisions, about when it's 
best to retire.
    But I think from my opinion we've been here before. In 2008 
we were influencing individuals, admittedly, to retire at age 
62. We've recognized the error of our ways. We've adopted a 
more neutral position by providing them with the facts, 
complete, objective, neutral facts, so that they can make 
sound, informed decisions. And I think we're going backwards if 
in fact, instead of influencing them to retire early, now we're 
going to be influencing them to retire later. I think our 
position is the right position to take and that is to just 
provide the facts and rely on the experts, like the financial 
advisers and professionals, to basically delve into their 
financial portfolios, to ask them questions about their health 
and family longevity, to ask them questions about their other 
streams of income.
    Our technicians are not financial advisers, as you 
mentioned and to be quite honest with you, the time that we 
spend delving into their financial portfolios could be spent 
working on other mission-critical work that we have to do.
    The Chairman. All right. Well, we'll come back to that. I 
think it's a crucial point, at least for our discussion.
    Kelly O'Donnell, what kind of knowledge do consumers have 
about Social Security and when they come to you do they know 
about the advantages of delaying benefits?
    Ms. O'Donnell. Based on our work with employers and 401(k) 
participants, I would say generally they're not aware. One of 
the things we have found with the roll-out of our retirement 
income service Income+, which is based on the 401(k), it 
immediately started bringing up more questions about the 
retirement income puzzle, so things like Social Security, 
Medicare, DB pensions, how all those things fit together.
    Social Security has generally been a surprise in terms of 
the benefit that can be obtained for both employers and 
participants, a pleasant surprise, but a surprise.
    To Ms. Green's remarks, I do believe that what we find is 
that--and this has been typical of what we've seen in the 
401(k)--is that education can provide a baseline of knowledge. 
We've seen that informing people and educating people about how 
to save and invest in their 401(k) has provided success to a 
point. However, when we really want someone to make an impact 
and to make the right financial decisions, that's where we find 
personal advice is really helpful. And I think the same 
situation is here, where individuals need to talk to someone, 
to really understand all the different and consider all the 
different points in their personal situation before making 
those decisions.
    The Chairman. Given the advantages of waiting to take their 
benefits, why do you think so few women in fact do wait?
    Ms. O'Donnell. I think some are just ill informed in terms 
of not understanding. I think some people--based on our 
research, we find that generally inertia is one of the biggest 
attitudes and behaviors. So inertia would say just to take it 
at 62 because that's what everyone else does. There's also 
uncertainty. There can be uncertainty about the stability of 
the Social Security System, and so some may feel that a bird in 
hand is better, even if it's not.
    I think that they have not had the benefit of financial 
professionals really explaining to them the true benefits of 
deferral.
    The Chairman. So you also feel that to some considerable 
extent the reason more women don't defer is because they don't 
fully understand the ramifications?
    Ms. O'Donnell. Definitely.
    The Chairman. Do you feel that way, Ms. Bovbjerg?
    Ms. Bovbjerg. I do, and I would just like to point out that 
46 percent of unmarried people are relying nearly entirely on 
Social Security, 23 percent of couples. Those are a lot of 
people who are not going to have financial advisers, number 
one; and number two, they're really looking to Social Security 
for help. SSA's all they have available to them in retirement.
    So I really think that it is important that we use the 
Social Security platform to try to reach people. I don't 
disagree on getting employers more informed and certainly 
having employers help people when they consider their 
retirement options. But I think that it's really fundamental 
that SSA step in.
    The Chairman. Without being critical or personal here, but 
what I hear you saying is that this population of women would 
be better served if they had better information on the 
ramifications of when to start taking Social Security. And I 
think I hear you saying--and I'd like to hear you comment on 
that, LaTina--that, while Social Security should not--SSA 
should not be responsible for making those judgments, there is 
a question about whether or not SSA would be serving this 
population more fully if they were not given more information, 
a more clear understanding of the ramifications.
    That's not suggesting that there's anything being done 
wrong right now, just how we can make it better. I guess I'd be 
interested in your opinion.
    Ms. Burse Greene. We completely understand your concerns. 
We would be willing to sit down with you and your staff to try 
to look at your suggestions on how we can frame retirement 
options in a way so that we're not influencing them and not 
advising them on which decision to make. So I think we welcome 
that discussion, but again we have to do it in such a way that 
we're not influencing them in a particular direction.
    Ms. Entmacher. Senator Kohl.
    The Chairman. Yes?
    Ms. Entmacher. If I could just add something to the 
conversation here. We do some education through webinars with 
women and I certainly agree that better understanding of the 
consequences of the decisions people make about claiming Social 
Security, the consequences of a spouse's decision, is very much 
needed and would be very helpful.
    But there are quite a number of women and men who really 
don't have a choice, particularly in the last few years with 
prolonged periods of unemployment for many older workers who 
have lost their jobs, who can't get back into the workforce. We 
hear from women who say, you know: I'm 61 years old, I've been 
looking for work and looking for work. They know their benefits 
are going to be cut, but they don't know what they're going to 
live on. They don't have $100,000 in an IRA that they can use 
to tide them through, and they're really struggling and, quite 
frankly, taking Social Security may be better than charging a 
lot on a credit card just to make ends meet.
    I know in some of the other bills you've introduced you've 
recognized some of the employment challenges that older workers 
face. So there certainly are people out there for whom 
realistically waiting is not an option, and we have to address 
the broader picture of economic challenges.
    The Chairman. Yes, very good.
    Ms. Schaeffer, in your testimony you've referred to the 
idea of moving the retirement age possibly back. Yet GAO has 
previously reported to us about the unintended consequences of 
such an action, an increase, for example, in disability claims 
and a cut in benefits for those whose physical health or taxing 
jobs are forcing them to retire early.
    So how do we move back the age while still protecting these 
people who need the benefits the most at an earlier age?
    Ms. Schaeffer. Well, I think the first thing that we're all 
sort of recognizing is that there are some serious challenges 
to a defined benefit system, and that, while we're talking 
about all of these benefits they don't come without a cost, and 
that we have to remember that the current system is currently 
financially unsustainable.
    So there are going to be winners and losers in the way that 
it's reformed, but we have to do something because currently 
future workers aren't going to be seeing any of their money. So 
I think that the biggest point that I could make here is the 
importance in having a system that allows for flexibility, 
control, and ownership, so that people can plan and can design 
a retirement system that fits the needs of their family and 
their health, considers their health needs, their employment 
prospects, and allows them the greatest ability to be flexible 
throughout their time that they're in the workplace or at home.
    I think that you're pointing out a very important issue 
about the age at which we retire, but I think that we need to 
be very clear that in 1940 a man who reached age 65 was 
expected to live only 12.7 more years, a woman only 14.7 more 
years, but by 1990 the 65-year-old man is expected to live 15.3 
years and a woman 19.6 years. That's 2.5 more years of payments 
for the man and 5 more years of payments for the woman. That's 
wonderful that our life expectancy is increasing, but we again 
have to recognize the real actuarial cost that this means for 
all of us in terms of taxpayers.
    The Chairman. Thank you.
    Ms. Entmacher, as we know, we have a special minimum 
benefit today. But we understand that it was not really 
reaching people it was intended to cover. In many cases it is 
not. Can you tell us why that is and what are some of the ways 
we can fix this benefit to ensure that it protects the very 
poorest of the poor?
    Ms. Entmacher. Well, there are several reasons why it's not 
working. Just to illustrate how dramatically it's not working, 
about 40 percent of women workers receive a Social Security 
benefit that isn't enough to bring them out of poverty, whereas 
the special minimum benefit helps just over one-tenth of one 
percent of all beneficiaries. So it clearly is not reaching 
people that it was intended to.
    There are several reasons for that. One is that, while the 
regular Social Security benefit formula keeps pace with--is 
wage indexed, it keeps pace with increases in the standard of 
living, the special minimum benefit is not. It's indexed to 
poverty, so it shrinks every year.
    The second problem with it is that it requires a very 
substantial level of earnings to get a single year of credit 
toward the special minimum. For example, you must earn $12,280 
a year to get one year of credit toward the special minimum. To 
get a year of credit toward regular Social Security is $4530. 
And if you fall even a dollar short of that $12,280, you don't 
get any credit.
    That may not seem--$12,000 may not seem like a lot to some 
of the people in this room, but if you're working for minimum 
wage that's virtually full time, year-round minimum wage work. 
The nature of the low wage labor market is that low wage 
workers often can't get steady work. It's a seasonal labor 
market, jobs are temporary. Low wage workers have more 
struggles to pay for caregiving, so they may lose time out of 
the labor force when they can't go to work. They don't get paid 
time off to care for a child. They're more prone to 
disabilities.
    So that you've got a concentration of people who have 
interruptions in their work histories, as well as the nature of 
the labor market, that people often don't have that kind of 
steady work. So it's hard to qualify for benefits.
    The amount that we give people under the special minimum 
isn't enough to bring them out of poverty even if they have 30 
years of these earnings. And we don't give any credit for 
caregiving.
    So those are four ways that I've suggested to improve the 
special minimum: first of all, to make sure that it gives 
people at least 125 percent of poverty; to lower the amount 
needed to qualify for a year of credit; to index benefits to 
wages instead of prices, the way regular benefits are indexed; 
and to give eight years of caregiving credit, and that would 
make it much more effective.
    The Chairman. Good.
    Ms. Entmacher. Thank you.
    The Chairman. Other comments from the panel?
    [No response.]
    I am encouraged with the thought that we can work together, 
Ms. Greene, with you and your agency to be sure that we get as 
close to 100 percent as possible of information and 
understanding out there to women who are approaching 62 on some 
of the benefits of waiting until 66 or 70. I think we all feel 
that can make a big--really advantage the system, advantage the 
situations of these women who so clearly would be in a better 
situation and a better benefit if they waited.
    Who else wants to make comment? Yes, Barbara, go ahead.
    Ms. Bovbjerg. I just did want to say that I thought that 
what I just heard about framing the issue is so important. We 
heard that when we spoke to our experts about different policy 
options over and over, that how we talk about it is really 
important. We've long thought that we need to be more 
consistent across government, and I think that what you're 
suggesting is a really great start.
    The Chairman. And your point also that this huge gap 
between age 25 and age 60 when not enough information is 
getting out, so that when it gets out maybe at age 60 it's a 
little too late in some cases for them to have made their plans 
and they didn't understand the ramifications at an earlier time 
in their lives. We can do a better job with that also.
    How did it occur that we stopped sending out that 
information annually, do you know?
    Ms. Burse Greene. Yes. In March or April of 2011, furloughs 
were imminent at the time. We were spending $70 million a year 
in postage and mailing costs for the Statement. At that time, 
to be quite honest with you--and it was a very difficult 
decision to make--we had to figure out how we could continue to 
have adequate staff available to fulfill our mission-critical 
work, our mission-critical activities, be it processing claims, 
program integrity work, and so forth.
    The bottom line is that a decision was made that we would 
suspend mailing the statements so that we could take that $70 
million--for fiscal year 2011 it was actually $30 million--and 
divert that to keep staff on duty in order to perform our 
mission-critical work. Since that time, as you know, we've 
developed online Statement that is available 24-7. We resumed 
mailing the Statement for individuals 60 and over who are not 
currently receiving benefits.
    On Monday we resumed mailing a one-time Statement to 
individuals turning age 25. As part of the President's fiscal 
year 2013 budget, there are sufficient funds for us to resume 
mailing the Statement to everyone who is not currently 
receiving benefits. But, of course, it depends on what the 
actual appropriation will be, that will determine the tough 
decisions we're going to have to make going forward. We will 
continue to evaluate our options.
    The Chairman. Did I hear you just say that there are plans 
afoot to resume those mailings?
    Ms. Burse Greene. There are sufficient funds in the 
President's fiscal year 2013 budget that is correct. But it 
remains to be seen whether or not we actually receive that 
budget.
    The Chairman. Did you refer also to the cost involved?
    Ms. Burse Greene. Correct. It costs $70 million a year.
    The Chairman. 7-0.
    Ms. Burse Greene. 70 that is correct, 7-0, for postage and 
mailing costs.
    The Chairman. Were we to resume an annual mailing to 
everyone?
    Ms. Burse Greene. That is correct.
    The Chairman. $70 million per year?
    Ms. Burse Greene. That is correct.
    The Chairman. All right, thank you.
    Senator Blumenthal, we've been waiting for you and your 
expertise.
    Senator Blumenthal. Thank you.
    Let me thank all of you for being here today. I apologize 
that I was delayed at another event, another meeting, and I 
just really want to thank you all for contributing so 
importantly to the work that we're doing here, and thank our 
chairman, Chairman Kohl, for having this hearing on an issue 
that is so critically important, enhancing retirement security.
    Let me begin, Ms. Greene, if I may, by asking you what we 
can do and what your plans are to enhance the on-line tools? I 
know you've talked a little bit about it. Since the tools have 
been available, have you seen women retiring later and taking 
more advantage of on-line tools?
    Ms. Burse Greene. If I may just kind of bifurcate the two 
questions, I believe.
    Senator Blumenthal. Sure.
    Ms. Burse Greene. I think your first question deals with 
whether or not we've seen any trends in terms of claiming 
behavior of women. There has been some recent research by the 
Urban Institute--that study was actually funded by Social 
Security--that concluded that there has been a downward trend 
when you look at cohort behavior and claiming behavior. So, 
there has been a decrease in claiming at age 62 over the last 
10 years or so.
    There was a spike, I want to say, around 2008, 2009, but I 
think thus far that downward trend will likely continue over 
the next several years. My recollection, and I can confirm this 
for the record, is I don't recall there being any distinction 
between claiming by men and women. But again, I can go back and 
verify that for the record.
    Senator Blumenthal. And by downward you mean lower 
retirement age?
    Ms. Burse Greene. People are delaying their claiming 
decisions until later ages. So they're not all claiming at age 
62, but maybe at 63 or 64. Again, we can go back and look at 
the data itself and provide more specifics for the record. 
There is a downward trend.
    Senator Blumenthal. I'd be interested in that. And you 
rightly bifurcated the two questions. You have seen essentially 
higher age retirement, a trend toward higher age retirement, is 
that fair to say? Is that what you ----
    Ms. Burse Greene. There has been a downward trend in 
claiming at age 62. So I believe at one point in time, when you 
look at cohort data, 53 percent of the beneficiary population 
was retiring at age 62. I think now it's maybe 50 percent of 
the beneficiary population, when you look at cohort data 
specifically, are now retiring at age 62. So there has been a 
downward trend, and again I would prefer to provide more 
information for the record.
    Senator Blumenthal. I'd be very interested in those 
numbers. Then to take the second part of the question, use of 
on-line tools, any trends there?
    Ms. Burse Greene. Well, specifically for the online 
Statement, in a two-month period, we've had about 1.1 million 
individuals successfully register for our online Statement. Of 
those who successfully registered, 35 percent are within the 60 
to 69 age category, another 33 percent are within the 50-59 age 
category.
    So we're pleased with the results that we've seen so far 
and the interest in our online Statement. We will continue to 
use traditional and non-traditional means of communicating with 
individuals about online Statement availability.
    Senator Blumenthal. Let me ask you--and I would open this 
question to any of the others who are testifying today--
increasing the eligibility age; do you have an opinion as to 
whether that step would increase the number of women living in 
poverty? For you or anyone else who might want to answer.
    Ms. Entmacher. Well, I will take a stab at that, Senator. 
I'm Joan Entmacher. I'm testifying on behalf of the National 
Women's Law Center. We are concerned that it would, because 
raising the retirement age is really a benefit cut. It's nearly 
7 percent a year for every additional year. As I said earlier 
to Senator Kohl, there are people who don't have the option of 
waiting. They may not have sufficient financial resources to 
cover them until they claim Social Security. They may have 
worked in a low-paying job most of their life, have very little 
saved and be unable to find a job.
    Obviously, it's particularly hard today. Duration spells of 
unemployment are particularly hard for the elderly. Even before 
the recession, it was very hard for many older workers to get 
back into the labor force. They just weren't that attractive to 
some employers.
    So what this does is simply reduce the Social Security 
benefit for people whose benefits are already particularly 
likely to be low. The people who claim early are 
disproportionately lower income workers. So it is a problem.
    Doing something that doesn't involve raising the retirement 
age, but that does talk about different ages in a different 
way, that encourages people who can wait to do so, instead of 
saying 66 is the full retirement age, say 70 is the highest 
benefit age, and encourage people to think about these years 
differently, that could be positive. I don't know what the best 
words are and we'd have to check messages, but that's very 
different from actually changing the retirement age and 
lowering benefits for people who claim before that older age.
    Senator Blumenthal. Are there reliable studies on whether 
it's more difficult for men or women to get back into the 
workforce at certain ages?
    Ms. Entmacher. We can get back to you with some more 
studies. The National Women's Law Center has been looking at 
duration of spells of unemployment for older women and men. The 
numbers have jumped around a little bit. For a period of months 
it'll be longer for women and then you'll look a few months 
later and it will be even longer spells for older men. All I 
can say is it's very long for both older men and older women, 
and their unemployment rates are lower, but their duration of 
their periods of unemployment are higher, and it's true for 
both men and women. But I don't want to have a competition 
because it's really tough for both.
    Senator Blumenthal. If you could provide any studies that 
you think would be helpful or enlightening.
    Ms. Entmacher. I would be happy to do that, Senator. Thank 
you.
    Senator Blumenthal. Great.
    Let me ask Ms. O'Donnell, can you talk a little about what 
we can do, what government can do, to make sure that there is 
better information and more information about what people, what 
women need to do in saving for retirement?
    Ms. O'Donnell. From our perspective and where our expertise 
lies, we're really about working with employers as part of 
their 401(k) plan and benefit plans. I think having the 
government urge more employers to help individuals and their 
employees with retirement income solutions, providing help with 
retirement--with Social Security strategies, would be very 
helpful.
    The 401(k) is unique in that next to Social Security it's 
the largest source of retirement income for many workers, and 
it also has the benefit of providing an environment with lower 
fees, fiduciary oversight from the plan sponsor. So there is 
more of a protected environment from the employer. So anything 
the government can do to encourage employers to offer more 
retirement income help through their 401(k) plans and to 
include Social Security as part of what they should be 
providing help on we believe will be very impactful.
    I've been doing work with very large employers and their 
employees and we believe that one of the things employers are 
most excited about is looking at Social Security optimization 
and specifically deferring Social Security, because it's 
something that is not well known and they realize that it's 
probably the biggest impact later in life that one can have on 
their retirement income.
    Senator Blumenthal. Have you noticed any scams or other 
kinds of improper schemes preying on this area of retirement 
plans, and have you noticed any trends, either increasing 
numbers or anything that might be helpful to us?
    Ms. O'Donnell. Yes. I don't have specific studies. There 
are not a lot of studies on scams, I guess. But what we do hear 
from our employers--and they're very large employers--because 
of the demographics of the number of people retiring right now, 
there are different types of unscrupulous investment advisers 
who basically wait for people to retire, to have the lump sum. 
They circle the parking lots, they put flyers on the 
windshields of the cars, and they're waiting for people. Then 
typically what happens then is that they are selling them 
higher-priced investment products that may or may not be in 
their best interest.
    So that is one of the things that we feel is so beneficial 
about the 401(k) system, is that it provides that protection 
for the individual. And typically, because of the large scale 
and the number of assets that are in a 401(k) plan, the 
employer is able to get lower priced investment services and 
products available.
    Senator Blumenthal. Do you think that there's sufficient 
enforcement against these kinds of scams?
    Ms. O'Donnell. I'm unsure about--that's something I 
probably shouldn't comment on. I don't really understand that. 
I do know that it is an employer concern and that they--because 
we are an independent fiduciary to the employer, it's something 
that--having our services is something that they want because 
they do not want others--their employees looking to outside of 
the plan for help that may not be in their best interests.
    Senator Blumenthal. They want you so that someone 
unscrupulous isn't the one taking advantage of their employees.
    Ms. O'Donnell. Right.
    Senator Blumenthal. But do you know whether they report 
these kinds of problems when they see them?
    Ms. O'Donnell. I'm unsure. I know that they talk about them 
anecdotally, but I'm not sure whether they report them to the 
government or any agencies.
    Senator Blumenthal. Let me ask you and any of the others 
who are here whether you are concerned about elder abuse, of 
women in particular, elder financial abuse. Elder abuse is 
normally associated with physical abuse, but one of my 
interests is in abuse financially, by caretakers, by financial 
advisers, the spectrum of people who are in positions of trust 
vis-a-vis the elderly. And it affects women as well as men, 
obviously. So I'd be interested in any perspective you can 
offer.
    Ms. Bovbjerg. If I may, Senator. GAO has some work under 
way for this committee on elder abuse and financial 
exploitation. I was just checking to see when we're releasing 
it. It looks like it won't be before Thanksgiving.
    Senator Blumenthal. Before Thanksgiving?
    Ms. Bovbjerg. Yes. Yes. I can't tell you anything about it 
now. It's coming in November, but it is work we have under way.
    Senator Blumenthal. Okay. Well, thank you. That will be 
very helpful and very important. I don't know whether you ever 
offer previews of coming attractions.
    Ms. Bovbjerg. Usually not in a hearing environment, but we 
would be happy to come and speak with you.
    Senator Blumenthal. Well, I was going to suggest if you 
could talk to us I would appreciate it.
    Ms. Bovbjerg. If the committee is interested, we could 
arrange to have a briefing.
    Senator Blumenthal. Thank you.
    Any other perspectives or thoughts about that issue, elder 
financial abuse?
    [No response.]
    Well, I want to really thank all of you for being here 
today.
    Thank you very much, Mr. Chairman, it's been very important 
and useful, and I will be very interested in the additional 
information that you may be able to get us. Thank you.
    The Chairman. Thank you very much, Senator Blumenthal.
    We thank you all for being here today. You have cast light 
on an important subject and so your taking the time to come has 
been more than worthwhile.
    This hearing is adjourned.
    [Whereupon, at 3:14 p.m., the hearing was adjourned.]

                                APPENDIX

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