    [Senate Hearing 116-552]
    [From the U.S. Government Publishing Office]

                                                           S. Hrg. 116-552

                       FINANCIAL SECURITY IN RETIREMENT:
                              INNOVATIONS AND BEST
                          PRACTICES TO PROMOTE SAVINGS

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

                                    HEARING

                                   BEFORE THE

                           SPECIAL COMMITTEE ON AGING

                              UNITED STATES SENATE

                         ONE HUNDRED SIXTEENTH CONGRESS

                                 FIRST SESSION

                                   __________

                                 WASHINGTON, DC

                                   __________

                                FEBURARY 6, 2019

                                   __________

                               Serial No. 116-02

             Printed for the use of the Special Committee on Aging

    [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

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

                                   __________

                        U.S. GOVERNMENT PUBLISHING OFFICE
    47-615 PDF                 WASHINGTON : 2022

    -----------------------------------------------------------------------------------

                           SPECIAL COMMITTEE ON AGING

                       SUSAN M. COLLINS, Maine, Chairman

    TIM SCOTT, South Carolina            ROBERT P. CASEY, JR., Pennsylvania
    RICHARD BURR, North Carolina         KIRSTEN E. GILLIBRAND, New York
    MARTHA McSALLY, Arizona              RICHARD BLUMENTHAL, Connecticut
    MARCO RUBIO, Florida                 ELIZABETH WARREN, Massachusetts
    JOSH HAWLEY, Missouri                DOUG JONES, Alabama
    MIKE BRAUN, Indiana                  KYRSTEN SINEMA, Arizona
    RICK SCOTT, Florida                  JACKY ROSEN, Nevada
                                  ----------
                Sarah Khasawinah, Majority Acting Staff Director
                     Kathryn Mevis, Minority Staff Director

                             C  O  N  T  E  N  T  S

                                  ----------

                                                                       Page

    Opening Statement of Senator Susan M. Collins, Chairman..........     1
    Opening Statement of Senator Robert P. Casey, Jr., Ranking Member     3

                               PANEL OF WITNESSES

    Hon. Gene L. Dodaro, Comptroller General of The United States,
      Washington, D.C................................................     5
    John Scott, Retirement Savings Project Director, The Pew
      Charitable Trusts, Washington, D.C.............................     6
    Denis St. Peter, President and Chief Executive Officer, CES,
      Inc., Brewer, Maine............................................     8
    Linda K. Stone, Fellow Volunteer, Women's Institute for a Secure
      Retirement (WISER), Bryn Mawr, Pennsylvania....................     9

                                    APPENDIX
                          Prepared Witness Statements

    Hon. Gene L. Dodaro, Comptroller General of The United States,
      Washington, D.C................................................    35
    John Scott, Retirement Savings Project Director, The Pew
      Charitable Trusts, Washington, D.C.............................    79
    Denis St. Peter, President and Chief Executive Officer, CES,
      Inc., Brewer, Maine............................................    89
    Linda K. Stone, Fellow Volunteer, Women's Institute for a Secure
      Retirement (WISER), Bryn Mawr, Pennsylvania....................    96

                           Statements for the Record

    The Bipartisan Policy Center's Commission on Retirement Security
      and Personal Savings...........................................   105

                       FINANCIAL SECURITY IN RETIREMENT:
                              INNOVATIONS AND BEST
                          PRACTICES TO PROMOTE SAVINGS

                                  ----------

                          WEDNESDAY, FEBRUARY 6, 2019

                                           U.S. Senate,
                                    Special Committee on Aging,
                                                        Washington, DC.
        The Committee met, pursuant to notice, at 9:30 a.m., in
    Room 562, Dirksen Senate Office Building, Hon. Susan M.
    Collins, Chairman of the Committee, presiding.
        Present: Senators Collins, McSally, Hawley, Braun, Rick
    Scott, Casey, Blumenthal, Jones, Sinema, and Rosen.

                     OPENING STATEMENT OF SENATOR
                       SUSAN M. COLLINS, CHAIRMAN

        The Chairman. The Committee will come to order.
        Good morning. Ten thousand Americans are turning 65 every
    day. It used to be that this was the traditional age of
    retirement, but today, as this Committee has examined in
    previous hearings, many older Americans continue to work well
    past the age of 65. Some of those who are healthy enough want
    to continue working because of the personal satisfaction it
    brings. Others, however, continue to work because they simply
    have no choice. They cannot afford to retire.
        The Center for Retirement Research estimates that there is
    a $7.8 trillion gap between what Americans have saved for
    retirement and what they will actually need. As Americans live
    longer, the risk that they will outlive their savings only
    increases.
        Perhaps most startling are studies that show just how
    little Americans have in savings. According to the AARP, the
    typical working household in the State of Maine has just $3,000
    saved for retirement. In fact, one out of two Americans has
    less than $1,000 in savings. For those living paycheck to
    paycheck, it can be difficult to cover the heating bill or
    afford much-needed medications, much less save for the future.
    For many, saving for retirement seems out of the question.
        I am also particularly concerned about the impact of those
    who take time out from the workforce to care for others on
    their retirement security. We know that time spent caring for
    loved ones can have implications for lifetime earnings and
    retirement savings.
        We are on the verge of a national crisis. We did not get
    here overnight. Over the past several decades, employment
    patterns in America have changed, creating new opportunities in
    some ways, and in other ways challenging the notion of
    retirement as our parents and our grandparents knew it. Three
    emerging retirement trends, in particular, warrant our
    attention.
        First, traditional pensions outside of the public sector
    are rare these days as employers have shifted away from
    employer-based ``defined benefit'' plans to ``defined
    contribution'' plans, such as 401(k)'s. This means that
    individuals are becoming increasingly responsible for their own
    retirement planning and are assuming more of the risk.
        Second, Americans who look to employer-sponsored plans are
    finding that many companies simply do not offer this option. In
    Maine, about 46 percent of all private sector employees work
    for an employer that does not offer a retirement plan.
        Third, it is increasingly clear that Social Security should
    not be the only source of retirement income that retirees count
    on to sustain their current standard of living. Nationwide, the
    Social Security Administration notes that among its
    beneficiaries, 48 percent of married couples and 69 percent of
    unmarried individuals receive half of their income for
    retirement, or more, from Social Security. Many seniors in my
    State rely almost solely on Social Security to cover their
    monthly expenses in retirement, despite the fact that the
    average annual benefit is just under $16,000 a year.
        Today we will examine the State of our Nation's retirement
    system. The Government Accountability Office has done extensive
    work studying this issue, including issuing this very
    comprehensive report, which has been updated for our hearing,
    and I very much appreciate the Comptroller General's personal
    interest in addressing the challenges that make it difficult
    for far too many Americans to have a comfortable retirement by
    adequately saving for the future.
        At the Federal level, we must continue to look for ways to
    help employers who wish to do so to start their own retirement
    plans for their employees. The Small Business Administration
    estimates that about 60 million Americans work for small
    businesses. To help make it easier and less expensive for these
    employers to establish retirement plans, as well as to
    encourage individuals to save more of their own hard-earned
    money, Senator Hassan and I have introduced the Retirement
    Security Act, and to provide greater flexibility and access to
    both employees and their employers seeking to use the popular
    SIMPLE plans as an option for saving for retirement, I have
    also introduced a second bill, the SIMPLE Plan Modernization
    Act, with my colleague Senator Mark Warner of Virginia.
        We know that when full-time employees have access to
    retirement plans, on average 85 percent will contribute.
    Clearly, increasing access to employer-sponsored plans is a
    vital part of ensuring retirement security.
        This is a significant public policy problem that requires
    bipartisan solutions. The longer that we ignore the looming
    retirement crisis, the worse that it will become. 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 the fear that they will fall
    into poverty during their golden years. I look forward to our
    discussion today with the excellent panel that we have
    assembled, and I am now delighted to turn to our Ranking
    Member, Senator Casey, for his opening statement.

                     OPENING STATEMENT OF SENATOR
                  ROBERT P. CASEY, JR., RANKING MEMBER

        Senator Casey. Thank you, Chairman Collins, for holding
    this hearing today on this critically important subject.
        Having financial security in retirement is a goal for each
    and every family in America. 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 millions of American families are
    approaching retirement with almost nothing saved, and despite
    working hard their whole lives, too many seniors are finding
    themselves barely able to make ends meet.
        According to the GAO, roughly one in four households ages
    65 to 74 have zero--zero--retirement savings of any kind, and
    many others have managed to save only a fraction of what they
    will need. Some are living in fear of seeing significant cuts
    to a pension they have planned their lives around. The truth is
    that our retirement system does well for some, but it allows
    millions of Americans to fall through the cracks.
        As we will hear today, this is particularly true when it
    comes to women, who on average have lower retirement incomes
    and are more likely to live in poverty when in old age, and it
    is true for people who lack access to savings options at work
    and those who did earn retirement benefits at work but now live
    in danger of seeing them cut.
        Our Nation deserves better, more secure retirement options.
    We can start by strengthening the backbone of our Nation's
    retirement system, Social Security itself. We must ensure that
    Social Security is able to keep the promise--the promise--of
    financial security in retirement. We must not let Americans
    relying upon Social Security slide into poverty.
        That is why today I am introducing a bill to boost Social
    Security benefits for women who are the most likely to end up
    in poverty. Widows and widows with disabilities are
    significantly more likely to live in poverty in old age than
    are other Social Security recipients. The bill is the Surviving
    Widow Income Fair Treatment Act, which would eliminate
    arbitrary claiming rules and caps that substantially reduce a
    widow's benefits. I am pleased that a number of my colleagues
    have joined in introducing this bill, two members of this
    committee, in fact, Senators Blumenthal and Gillibrand.
        In addition to strengthening Social Security, we must
    ensure that promises to workers relying upon pensions are kept.
    Workers across the country, including tens of thousands in my
    home State of Pennsylvania, fear the pensions they have earned
    will be dramatically cut through no fault of their own.
    Congress must act immediately to keep multiemployer pensions
    solvent.
        Finally, we must work to ensure that our retirement savings
    system works for all Americans. We must work to expand access
    to workplace retirement plans, and we must make tax incentives
    for retirement savings, like the Saver's Credit, useful to the
    families who actually need it the most.
        We must approach these problems in a comprehensive fashion
    that ensures that all workers can participate and that all
    workers receive the benefits they have earned.
        I would also like to quickly note that for today's hearing,
    we are pleased to be represented at the witness table by so
    many with Pennsylvania roots. Linda Stone is from Bryn Mawr,
    Pennsylvania, and does a lot of her work obviously in
    Pennsylvania. The Comptroller General is here who has roots in
    Pennsylvania and who graduated from Lycoming College. John
    Scott has two degrees from Pennsylvania schools, and we are
    happy about that, both Penn State and, I have here--Penn State
    and Swarthmore. Yes, those are the two, and before the hearing
    is over, probably someone else will stand up and claim
    Pennsylvania roots.
        Chairman Collins, I will try not to dwell on that, but we
    are grateful for the time you set aside for this hearing on
    this critical issue. Thanks very much.
        The Chairman. Senator Casey, I will say that you did manage
    to one-up me on the number of witnesses with ties to your
    State, but I would point out that I was Chairman of the
    Committee with responsibility for confirming the Comptroller
    General, so but for me----
        Senator Casey. I think you got me.
        The Chairman. I do want to welcome a new member of our
    Committee, Senator Scott from Florida. Obviously, Florida is
    the State with the oldest percentage of seniors. Maine is the
    oldest State by median age, and Pennsylvania is not far behind,
    so all three of us have a deep commitment to the issue of
    improving retirement security, which is one of the four major
    focuses of our Committee.
        Let me now turn to our witnesses, and, again, welcome,
    Senator Scott, for being a member of the Senate Aging
    Committee.
        First, I am very pleased to welcome the much sought and
    fought over this morning Comptroller General of the United
    States, Gene Dodaro. Mr. Dodaro's career at the GAO spans more
    than 40 years. His testimony today is based on extensive work
    the GAO has done to examine the State of the Nation's
    retirement system, but I also know that this is a personal
    passion for him and that he has been sounding the alarm for
    many years, so we welcome you and look forward to your
    testimony.
        Next we will hear from John Scott, the retirement savings
    project director at The Pew Charitable Trusts. Mr. Scott
    conducts original research to unlock barriers to retirement
    savings. He also develops policy initiatives that could lead to
    increased retirement savings and other strategies to encourage
    Americans to save more.
        We will then turn to our next witness who happens to be
    from the great State of Maine, Denis St. Peter. Mr. St. Peter
    is the president and CEO of CES, an engineering firm in Brewer,
    Maine. CES employs around 100 people and was recently the
    recipient of this year's Bangor Regional Chamber of Commerce
    Business of the Year Award. He will describe the challenges of
    establishing effective retirement plans for small businesses
    and the benefits of such plans to employees.
        I will now turn to our Ranking Member, Senator Casey, to
    introduce our final witness.
        Senator Casey. Thank you, Chairman Collins. I am pleased to
    introduce Linda Stone from Bryn Mawr, Pennsylvania, Montgomery
    County. Linda Stone is currently a volunteer fellow with the
    Women's Institute for Secure Retirement. She is an actuary, 26
    years' experience advising companies on their retirement plans,
    a graduate of St. Joe's University. She travels across
    Pennsylvania to educate people on the challenges that women
    face in preparing for retirement. In fact, she spent her career
    working in retirement security. She will tell us about what can
    be done to help more Americans gain economic security in
    retirement.
        Linda, we are grateful you are here. Thanks for traveling
    to Washington, and we are looking forward to your testimony.
        The Chairman. Thank you very much.
        I also want to welcome another new member to our Committee,
    Senator Jacky Rosen from Nevada. We are delighted to have you
    joining our Committee as well. Thank you.
        Comptroller General, the floor is yours.

             STATEMENT OF HON. GENE L. DODARO, COMPTROLLER
             GENERAL OF THE UNITED STATES, WASHINGTON, D.C.

        Mr. Dodaro. Thank you very much. Chairman Collins, it is a
    pleasure to be here, Ranking Member Senator Casey, Senator
    Rosen. I greatly appreciate the opportunity to talk about GAO's
    work on this important subject.
        The current retirement system is not well prepared to meet
    the 21st century needs of our country. All three pillars of the
    system--Government programs, employer-based solutions,
    individuals savings on their own--are under a lot of stress and
    face a number of challenges going forward.
        In the Government domain, the Social Security Old-Age and
    Survivors Trust Fund will have enough to pay 77 percent of
    scheduled benefits by 2034, and it faces serious and
    substantial long-term solvency problems.
        The multiemployer portion of the Pension Benefit Guaranty
    Corporation is expected at 90 percent certainty to be insolvent
    by 2025.
        The Medicare Hospital Trust Fund by 2026 will only have
    enough funds to pay 91 cents on the dollar of scheduled
    Medicare benefits.
        When you turn to the employer side, one-third of all
    working populations have no access to employer-based plans, so
    they are very limited, and you pointed this out in your opening
    comments very appropriately, and the shift, as Chairman Collins
    explained, to defined contribution plans from defined benefit
    plans has a number of implications.
        On the positive side, it more fits the mobility of the
    workforce today because the benefits are portable. A number of
    people are using it to meaningfully save for retirement,
    particularly high-income workers.
        On the other side, low-income workers tend to have much
    smaller balances in their accounts, and, importantly, as you
    point out, Chairman Collins, it shifted the responsibility to
    individuals to make many more complicated financial decisions
    on their own, in many cases without a lot of support in order
    to do so. It raises the risk for individuals.
        Now, the third pillar has always been individuals saving on
    their own in addition to these vehicles by the Government and
    the employers, but there we see many challenges. Some people
    are doing very well, but many are not, and they are facing head
    winds of relatively low real wage growth, high household debt
    payments, and rising costs for out-of-pocket health care costs,
    which continue to rise faster than the economy, so they are
    struggling as well.
        The bottom line in this case is that it has been over 40
    years since the Congress commissioned a comprehensive
    commission to look holistically at the retirement system in the
    United States.
        Many actions have been taken incrementally over the years--
    the establishment of the Social Security system in 1935, the
    ERISA law in 1974, and there have been a lot of incremental
    changes since then, but the demographics of the country have
    changed dramatically. We are aging as a population. We have low
    fertility rates, increased longevity--which is a good thing,
    but it is causing people to live a lot longer and, therefore,
    the financial models particularly for Social Security and some
    of the PBGC programs, are not well suited to meet these current
    needs and are really in imminent danger of not fulfilling the
    promise, Senator Casey, as you mentioned, that our country has
    made.
        I would urge the Congress to act on GAO's recommendation,
    which would be to establish a comprehensive commission to look
    at all these things interrelated and not just look at Social
    Security alone or employer-based systems or individuals'
    efforts, but to look comprehensively at this, given the
    changing dynamics of our country and the changing nature of
    work in the United States, and unless the Congress acts soon, I
    am afraid many Americans will not face a safe and secure
    retirement, and also the fiscal pressures will mount on the
    Federal Government at a time when the Federal Government is
    already on a long-term, unsustainable fiscal path.
        These are very weighty policy issues, both public policy
    and fiscal policy, and I really commend the Committee for
    focusing in on these issues and taking this very seriously.
    Whatever we could do at GAO to help, we will continue to do so.
        I would be happy to answer questions at the appropriate
    time.
        The Chairman. Thank you very much, Mr. Dodaro.
        Mr. Scott.

                        STATEMENT OF JOHN SCOTT,

                  RETIREMENT SAVINGS PROJECT DIRECTOR,

              THE PEW CHARITABLE TRUSTS, WASHINGTON, D.C.

        Mr. John Scott. Thank you, Madam Chairwoman and Ranking
    Member Casey, for the opportunity to testify on the importance
    of financial security in retirement. The Pew Charitable Trusts
    is an independent, nonpartisan, nonprofit organization that
    applies a rigorous analytical approach to improve public
    policy.
        While workplace retirement plans are the primary vehicle
    for ensuring financial security in old age, as was noted, one-
    third of private sector workers still lack access to a
    retirement plan. Inadequate savings are not just bad for
    workers' retirement security, but also impose costs for Federal
    and State governments as well as on the larger economy.
        A 2016 study by the University of Maine, for example, found
    that Maine's retirement age population is projected to increase
    30 percent by 2032. The associated costs of social services
    could grow to $362 million by 2032, with the State's share
    growing to $61 million, which would be double what the State
    covered in 2016.
        A similar Pennsylvania study determined that net costs to
    the Commonwealth due to insufficient retirement savings are
    projected to grow to $1.1 billion by 2030.
        To understand the barriers to savings, our research focused
    on small businesses and their employees. Certain categories of
    workers at small firms have inadequate retirement coverage. For
    example, part-timers are almost half as likely as full-time
    workers to have access to retirement benefits, and Hispanic,
    black, and Asian workers have much lower access rates than
    whites, but given the importance of plan sponsorship, I want to
    focus my remarks on small employers.
        Pew surveyed over 1,600 small business owners, both plan
    sponsors and those that did not sponsor a plan. We found that
    employers offered various reasons for providing retirement
    benefits. Nearly half cited a desire to help employees save for
    retirement as the main reason. Nearly a third said attracting
    and retaining workers was the reason they offered a retirement
    plan.
        We also found that firm financial stability is strongly
    associated with plan sponsorship. For example, employers with
    increasing earnings are much more likely to offer a plan than
    if earnings were flat. Businesses then tend to adopt plans
    during a middle phase in their development after initial
    startup and during a period of expansion and growth.
        We also asked about plan features that can improve workers'
    financial security, like employer contributions and automatic
    enrollment. Nearly all surveyed employers with retirement
    savings plans made employer contributions, but two-thirds of
    small business plan sponsors did not automatically enroll their
    workers. When asked why not, executives said either they were
    satisfied with their current set-up or they perceived employees
    would not like to be automatically enrolled.
        We also surveyed employers that did not sponsor retirement
    plans, and we first asked why they did not offer one. Thirty-
    seven percent of employers cited startup costs as too
    expensive; another 22 percent cited a lack of internal
    administrative capacity to run a retirement plan. Unfamiliarity
    with retirement plan options may also be a barrier. For
    example, only 11 percent of survey respondents were very
    familiar with a SIMPLE IRA plan, which is designed for small
    businesses.
        When businesses without a plan were asked what would
    motivate them to begin one, clear majorities cited increased
    business profits and increased tax credits for startup costs.
        There are many promising ideas to address these and other
    challenges. Let me note that Pew does not endorse or oppose any
    particular legislative initiative. However, legislation such as
    introduced by Senator Collins and your colleagues emphasized
    critical areas such as automatic enrollment, multiple employer
    plans, or MEPs, improving SIMPLE IRA plans, and increasing tax
    credits for startup costs.
        Initiatives that reduce plans' startup costs and improving
    awareness of SIMPLE plans and other plan options could be
    useful in encouraging new plan formation, and our research
    found that small businesses reacted very positively to the idea
    of MEPs, although it is not clear if they would actually join
    MEPs if they were made more widely available.
        Auto-enrollment also could boost participation. For
    example, in the State of Oregon, where they are using auto-
    enrollment to cover workers who do not have a plan at their
    jobs, 70 percent of workers are participating and saving at a
    rate of just over 5 percent of pay, but as you know, more work
    needs to be done, and in that regard I want to commend the GAO
    for their 2017 report and for their call for a comprehensive
    examination of the retirement system.
        Thank you again for the opportunity to testify.
        The Chairman. Thank you very much, Mr. Scott, for all that
    great data. I appreciate it.
        Mr. St. Peter.

              STATEMENT OF DENIS ST. PETER, PRESIDENT AND
           CHIEF EXECUTIVE OFFICER, CES, INC., BREWER, MAINE

        Mr. St. Peter. Chair Collins, Ranking Member Casey, thank
    you very much for inviting me here today to discuss our company
    approach to promoting retirement savings for our employees. My
    name is Denis St. Peter, and I am licensed professional
    engineer in the great State of Maine. I am also the president
    and CEO of our company, but I am not a finance expert, so more
    an engineering degree.
        I have some additional information about our company in my
    written testimony, but for the sake of time, I am skipping
    through it. It includes our mission, vision, value statements,
    which I think are key to the approach that we took to improve
    our retirement plan. If you take the time to read through that,
    you will see that we do focus on and care about our employees,
    we care about our clients, and we care about the communities
    that we live and work in.
        About 10 years ago, we went through an ownership and
    leadership transition in our company. That gave us an
    opportunity to reevaluate our business approaches, one of which
    was our retirement plan. At the time we had a 401(k) plan with
    a profit-sharing component, but we did not have a match at the
    time, so there were really four key things that led us to
    change that.
        The first one, the lack of matching, was really perceived
    by our key employees as a missing component to our benefit
    plan, so for us to retain top talent and recruit good people,
    we felt we needed to add that, and again, it was consistent
    with our mission, vision, values.
        The second item was that, in general, we knew that our CES
    employees were underfunding their retirement. We had a
    participation rate at about 62 percent and an average employee
    contribution around 3.9 percent of base salary.
        The third item was really my history. As the first job I
    had out of college, I worked for the Federal Government, and I
    had 5-percent match opportunity, and I remembered how that
    really made me think about saving for retirement at that point.
    I am not sure I would have saved if I did not have the match.
        The fourth criteria really was the top-heavy testing that
    was required in our plan, and we were close to exceeding that
    60-percent limit.
        We set a course on improving our plan. Our goal was to get
    to the 4-percent match. We increased it 1 percent a year to get
    to that 4 percent. That was in the 2011 to 2014 timeframe. We
    also implemented several other best practices. We started an
    investment committee, including an investment adviser to
    participate in that committee. We fully utilized our third-
    party administrator. We also established our benefits committee
    and lots and lots of education and communication with our
    employees.
        I have got four slides that show the results of our
    progress, the first one being participation rate. As I
    mentioned before, we were around 62 percent. We are up close to
    90 percent. Our goal is 100 percent. We are getting there.
        The next slide is average contribution as a percentage of
    base salary. We were averaging just under 4 percent, and now we
    are up to close to 14 percent.
        The next slide is our 401(k) plan asset value. In 2010, we
    were at $2.45 million. We are now at $7.27 million. That
    includes a sizable distribution from one of our founding
    partners, so probably about closer to $8 million.
        Then the last slide is the top-heavy testing results. As I
    mentioned earlier, we were close to the 60-percent limit, at
    59.8, and we have shown some pretty good results from our
    matching program and other best practices. We are down to 48.7
    percent.
        I would be willing to answer any questions later.
        The Chairman. Thank you very much, Mr. St. Peter.
        Ms. Stone.

                      STATEMENT OF LINDA K. STONE,

               FELLOW VOLUNTEER, WOMEN'S INSTITUTE FOR A

           SECURE RETIREMENT (WISER), BRYN MAWR, PENNSYLVANIA

        Ms. Stone. Good morning, Chairman Collins, Ranking Member
    Casey, and distinguished members of the Committee. I appreciate
    the opportunity to appear before you today to discuss financial
    security in retirement, including the significant and unique
    retirement risks that many women face.
        I am here today in my capacity as a volunteer Fellow with
    the Women's Institute for a Secure Retirement (WISER). WISER is
    a nonprofit organization that works to help women, educators,
    and policymakers understand the important issues surrounding
    women's retirement income. Through my work with WISER and the
    National Resource Center on Women and Retirement Planning, in
    cooperation with the Administration on Aging, I have presented
    workshops to diverse groups of women across the country and
    have heard directly about their experiences.
        One reason that I am so passionate about this issue is the
    experience of my own mother. She was a ``Rosie the Riveter''
    who worked in the shipyards in Chester, Pennsylvania, during
    World War II. After her divorce from my father, she was able to
    support our family while working as a machinist and later as a
    nursing home aide. She did not know to try to get a spousal
    benefit from my father's workplace retirement plan or to see if
    there were spousal Social Security benefits that would be
    larger than her own. There is more that can be done to help
    women like my mother have a secure retirement.
        First, I would like to address a question that WISER often
    receives: Why focus on women? Quite simply, there are 5.7
    million more women than men at age 65, and 67 percent of the
    over-age-85 population are female. Many women over age 85 end
    up near-poor or in poverty even if they have never been poor
    before. Women face greater longevity risk than men due to their
    longer lives and the resulting need for more income. At age 65,
    women can expect to live an average of 21-plus years, 3 years
    Mr. St. Peter than men. One out of every two women in their
    mid-50's today will live until age 90.
        Having more income during retirement starts with your
    earnings during your working years and your access to employer-
    sponsored savings and pension plans. Generally, no matter how
    you slice and dice it, women earn less than men throughout
    their lifetimes. Caregiving responsibilities for children,
    parents, as well as spouses cause women to spend years out of
    the job market or to work part-time without access to benefits.
    Social Security reports that, on average, women have 9 years
    with zero earnings. The zero earnings are compounded in the
    calculation of their Social Security benefit.
        This all results in women having less in savings and
    employer-sponsored retirement benefits as most employer plans
    require full-time status to be able to participate and base
    benefits on pay, and many women who work have no access to
    employer-sponsored plans.
        A long life increases the risk that inflation will
    negatively impact the ability to live on a limited income and
    increases the chance that women will outlive their assets.
    Women are more likely to need long-term care in these later
    years as they are less likely to have a family caregiver. Among
    women more than 85 years old, 87 percent are not married.
        The bottom line is that women accumulate less money than
    men during their working years and have to make it last longer.
        Women often have a planning horizon that is much too short.
    As a result, they underestimate their need for savings to
    support the many years they will be in retirement and the need
    to start saving as early as possible.
        Women nearing retirement who do have savings have the
    burden of not only determining how to invest the money before
    retirement but also how to appropriately spend down their
    savings so that the assets last for their lifetime. As they
    change jobs, many do not appreciate how not cashing out
    balances, no matter how small, can make a big difference in the
    amount of money that is available at retirement.
        The reality of today's retirement landscape for many is do-
    it-yourself, and do it right, or live at or below the edge of
    poverty. The nature of today's system of individual
    responsibility demands financial capability. Women are in the
    difficult position of making big decisions while being unable
    to afford even a small mistake. Divorce, widowhood, and needing
    to leave the workplace earlier than expected can derail even
    the best planners.
        We need to strengthen existing programs wherever possible.
    That means focusing on Social Security and Medicare, expanding
    access to employer-sponsored retirement programs, and
    supporting and expanding individual savings initiatives.
        In conclusion, thank you for including a focus on women's
    retirement issues today. We know from the women who have
    contacted WISER and attended our workshops that they want to
    take better control of their retirement. We need to make sure
    every woman is getting support they need through education and
    access to carefully crafted programs that will make a
    difference in their ability to have a secure retirement.
        The Chairman. Thank you very much, Ms. Stone.
        Comptroller General, I want to start with you, and I want
    to start with a very basic question. First, however, let me
    acknowledge that we have been joined by three more of our
    colleagues: Senator McSally, Senator Braun, and Senator Jones.
    You will find that members will be coming in and out throughout
    the hearing, as Mr. Dodaro is well aware of, but it may come as
    a surprise to others as Senators are trying to balance
    complicated schedules.
        Comptroller General, I want to start with a very basic
    question, and that is, what are the biggest impediments that
    employees face in saving enough for retirement?
        Mr. Dodaro. There are a number of factors. I mentioned some
    earlier that I think are very important. One is that there is
    relatively low real wage growth, and many of the people in the
    country are earning about the same as they were in 1970 in real
    purchasing power, so that is number one.
        Number two is the accumulation of debt, but also I would
    say rising health care costs. Health care costs continue to
    rise faster than the economy, so the out-of-pocket costs are
    really important, and this is a factor in planning for
    retirement because you have more health care costs when you are
    in retirement and through the rest of your life. There are also
    features of the individual plans. In a defined contribution
    plan, those plans that do not have automatic enrollment reduce
    participation. We find that if there is automatic enrollment
    and even in some cases an auto-escalation clause as employees
    earn more, that helps save.
        You also have fees in those programs that are problematic
    in defined contribution plans, and in the defined benefit
    plans, there you have portability issues. If you change jobs
    frequently, there are the vesting requirements that are a
    problem in both kinds of plans, both defined contribution and
    defined benefit, and people do not understand that. Sometimes
    when they change jobs, they roll over or do not roll over their
    retirement accounts appropriately, so there are a lot of
    complicated factors.
        There is a set of basic economic factors that are important
    impediments, and then there are features of these plans that
    also can be impediments as well.
        The Chairman. Thank you.
        Mr. St. Peter, Ms. Stone mentioned people taking money out
    of their retirement plans when they change jobs and using it
    for non-retirement purposes, and I think when people are in
    their 20's and 30's, retirement seems so far away that
    oftentimes bad decisions are made, and I will confess to the
    worst financial decision that I ever made, which was when I
    left the Hill as a staffer with almost 12 years of retirement
    contributions, I withdrew all the money to buy a car instead of
    getting a car loan, and that was the worst financial decision I
    have ever made in my entire life, but I swear if just one
    person had said to me when I filed to withdraw the money, ``Do
    you really want to do this? You are already vested, and the
    implications are enormous, and there is nothing wrong with
    getting a car loan.'' I was just thinking, ``Oh, I cannot take
    on debt.'' And it was truly such a bad decision.
        I think a really important part of what your company does,
    Mr. St. Peter, is helping to improve people's understanding,
    your workers' understanding of financial decisions. Could you
    explain a little bit what you do?
        Mr. St. Peter. Sure. It is a double-edged sword, I think,
    the borrowing component of our 401(k) plans. I think it helps
    attract participation because they know it is not locked
    forever, but we do see the urge to borrow from the plan, and
    the benefit that we have as an employer is that we have an H.R.
    director who is kind of the first line that can counsel our
    employees that want to borrow from it, educate them that way.
    If she feels like she needs more expert advice, we have our
    investment adviser that willingly gives his time to communicate
    with an employee and help educate them of the negative
    consequences, and then the third line is our direct
    supervisors.
        We do have plenty of opportunities, and we just need to
    remind ourselves as a company to continue to take those
    opportunities to communicate with them.
        The Chairman. Your participation rate of nearly 90 percent
    is really impressive and shows the effort that you have made.
        Senator Casey?
        Senator Casey. Thank you, Chairman Collins.
        I will start with Linda Stone. Ms. Stone, I wanted to start
    with part of your written testimony where you talked about the
    complexity of Social Security claiming rules, and that might be
    among the biggest understatements that we can utter.
        Ms. Stone. Yes.
        Senator Casey. These issues get very, very little
    attention, and they warrant a spotlight, and I am grateful you
    are helping us with that today.
        The bill I talked about earlier would ensure that recently
    widowed individuals receive better information on the benefits
    available to them and how their claiming decisions, these
    complex rules and the decisions that flow from them, can
    permanently affect their retirement income.
        Based upon your experience talking with women in
    Pennsylvania saving for retirement, do you think there is a
    greater need for both more education and more guidance when it
    comes to these decisions?
        Ms. Stone. Yes, I think both, Senator Casey. Social
    Security claiming strategies can be very complicated, as you
    said, and a lot of women do not even quite understand that 65
    is not their Social Security full retirement age anymore. For
    some of them it is 67, and what does that mean if they take
    their benefit at 62? Because it is available at 62. That is
    quite a big reduction that lasts for somebody's whole entire
    life, and there does not seem to be as much knowledge about
    that as there could be.
        We get a lot of questions from women who are divorced, and
    one of the biggest ``aha'' moments that happens in some of our
    workshops is when we mention that if you have been married for
    10 years, you are eligible to collect on your ex-spouse's
    Social Security benefit, and so questions around surviving
    spouse benefits are also something that comes up quite often.
    You know, how are you eligible and how do you coordinate that
    if you also have a worker benefit? And you are likely aware
    that last year there was a report by the Social Security Office
    of the Inspector General that showed widows are not getting all
    of their options explained to them when they claim their
    benefit, and this has cost women hundreds of millions of
    dollars, because the rules are just incredibly complicated, and
    women need more education and, you know, factual advice on the
    implications of their decisions when they are in the process of
    making that decision that is going to impact their benefit for
    the rest of their life.
        Senator Casey. I guess part of this, of course, is what--in
    the case where it is a husband and a wife, and the wife
    survives, the husband passes away, sometimes the problem is
    what decision the husband made that then binds or limits what
    happens with the surviving spouse, the widow. Can you just walk
    through that circumstance?
        Ms. Stone. Yes. One of the things we talk about is that
    couples should figure out as a couple their claiming strategy,
    each of them, and then each of them as a couple, and obviously,
    they have different income levels, different life expectancies,
    and because the survivor benefit, you know, depends on the kind
    of highest benefit that the couple has, if the person making
    the most money--and for this we will say that is the husband--
    you know, can delay receipt of their benefit, that will leave
    more of a survivor benefit for their widow, but maybe they just
    want to collect it early, and they do not think as a couple we
    will be better off in the long run if you postpone getting your
    benefit so it does not get the early reduction or even
    increases it 8 percent a year if you wait past your full
    retirement age. That is a pretty good return to push that
    benefit back, and that means, you know, I will have as your
    widow a bigger survivor benefit, so let us think about what
    make sense for the family as we think about this, not just, you
    know, each of us as individuals, and that is something that,
    again, needs to be more education around a family discussion on
    that.
        Senator Casey. I know I have limited time, and I will try
    to do some followup, but, Comptroller General Dodaro, I wanted
    to ask you about the circumstance that you outline urging us to
    take action. If Congress does not take action, do you think it
    is likely that many current and future retirees in these
    multiemployer pension plans will see their benefits cut?
        Mr. Dodaro. Definitely. I mentioned it is 90 percent
    certain that PGBC's multiemployer insurance program will be
    insolvent by 2025. It goes up to 99 percent by 2026. If that
    happens, the amount of benefits that plan participants would
    receive will be even lower than what they are now. The single
    employer insurance program has a higher benefit. If you work 30
    years, you can get about $13,000, but if they go insolvent,
    they could get less than $2,000 a year, so that is not much of
    a retirement benefit, so they would definitely be hurt, so for
    the multiemployer portion, it is very urgent that Congress take
    action. I was pleased in the last Congress that a special
    committee was set up in order to address that, but they did not
    produce a final report, and I have been urging Congress on this
    for years. We have had the multiemployer program on our High-
    Risk List across the Government since 2009. We have had the
    single-employer program on it since 2003. That program is doing
    a little better now, but even the single-employer plan has
    reasonable expectations of losses of about $175 billion,
    according to recent PBGC estimates, so both components of
    PBGC's programs are facing financial uncertainty, but for right
    now, the most urgent program is the multiemployer program, and
    Congress needs to act, or these people are not going to have
    any meaningful benefit at all.
        Senator Casey. Thank you.
        The Chairman. Thank you.
        Senator McSally?
        Senator McSally. Thank you, Madam Chair. Thanks for having
    this important hearing today and for all the testimony.
        When I was over in the House, I started a working group on
    Women in the Workforce in the 21st Century, trying to identify
    what are the real issues that women are facing in the workforce
    and how we can close the pay gap on education and just choices
    that are happening in people's lives, and especially for women.
    As you mentioned, Ms. Stone, women are more likely to be
    caregivers for their children and their parents, and we had
    some testimony related to exactly what you are talking about
    today, and this is hearing is highlighting that it is not just
    impacting them through their whole lives, but as they are
    living longer, they have less income, less retirement, more
    likely to be in poverty, so I really appreciate all the work
    that you are doing to address this issue.
        You know, it seems like we are in situation where those who
    are retiring now, those women, the Baby Boomers, they have less
    earnings throughout their whole life, less savings, less
    retirement, less Social Security. Yet my generation--which is,
    what, Gen X?--we are the ones that are more likely to be then
    caring for them, so we are coming behind them with the very
    same dynamics happening. Women are wanting more flexibility.
    Women are wanting to be able to move in and out of the
    workforce. We are seeing this with our generation, which then
    is going to perpetuate the challenges that you mentioned as our
    generation moves into retirement.
        You mentioned in your testimony as some solutions, study
    ways to offer retirement protections to women with significant
    time spent as caregivers, including possibility of a provision
    for Social Security credits and credits for out-of-pocket
    expenses that may be preventing women from saving. Can you talk
    a little bit more about what you are proposing there and what
    that would look like?
        Ms. Stone. Well, I am not making any specific
    recommendations. I think there are a number of recommendations
    or thoughts around how to reflect caregiving in Social
    Security, and I think that is good that the conversation is
    happening. I think one of the things that we try to do at WISER
    is have women understand, before they make the decision to
    leave the workplace to care for someone, the actual kind of
    opportunity cost of that, that they are not only giving up
    their pay, they are giving up, you know, maybe their employer-
    provided benefits, other benefits that they may have, and are
    they going to be able to get back in the workplace?
        Some of what we are trying to do is have people understand
    there may be other options that could be used to not give up
    your own financial security necessarily as your first reaction
    is, ``I have to quit my job to go take care of Mom.''
        I think what we are trying to do is educate women, and I
    think to have kind of a policy decision about the facts, which
    is women do spend a lot of time out of the workplace, I think
    it is just good that that conversation is happening.
        Senator McSally. Great. Thanks. I want to followup with you
    maybe afterwards about any other specific ideas policy-wise,
    you know, related to what we are talking about.
        Also in Arizona, 54 percent of women are family caregivers
    right now, and we have a growing aging population in Arizona,
    so this is something that is very real, and trying to keep
    individuals in their homes and allow a better quality of life
    in their older years, these financial barriers are very real
    for so many of the people that I represent.
        I wanted to also ask about, you know, just the additional
    education we can have related to when someone becomes a widow
    or they are trying to make decisions with their own Social
    Security benefits. This is really complicated, as you said, and
    it is not--as is explained to you, I just went through this
    with someone close to me who lost her husband. It was like
    Mandarin Chinese; trying to understand what her options were
    and whether her own income and where the offset was and what
    month she might be able to get a benefit, it was really
    confusing.
        What can we do to make sure that it is simplified in the
    way, you know, individuals understand their options when they
    are looking at what their Social Security benefits are as a
    survivor or as someone who is continuing to work.
        Ms. Stone. Yes, I agree with you that is very complicated
    and more needs to be done, and I think it gets to how is the
    communication happening. You know, there used to be Social
    Security benefit statements mailed to people on an annual
    basis. That does not happen anymore, because then people could
    at least start getting used to like looking at their earnings:
    ``Oh, I see zeroes there. What does that mean?'' And, ``What is
    my benefit?'' And even to feel like when you call, you know,
    Social Security workers are doing their best, but it is very
    complicated, and to try to just get this explained to you over
    the phone, I do not know how anybody could really make
    decisions without really seeing something and, you know, can we
    have communications be done in a way that people can more
    easily read and understand them? Because some information is
    out there, and it is just making sure people know where to get
    that information and maybe having it, you know, kind of pushed
    to them versus having people out on the Internet trying to find
    some of this information themselves.
        Senator McSally. Great. Thank you. I am out of time. I
    appreciate it.
        The Chairman. Thank you.
        Senator Jones?
        Senator Jones. Thank you, Chairman Collins. I appreciate
    it, and thank you all for coming today.
        Just to pick up a little bit on what Senator McSally said,
    with regard to women, obviously, you know, the President talked
    last night about the women in the workforce now. More and more
    women entering the workforce will hopefully narrow that savings
    gap a little bit down the road, but at the same time, 50 years
    or more after the passage of the Equal Pay Act, 10 years after
    the passage of the Lilly Ledbetter Fair--Equal Pay for Equal
    Work Act, we still have a disparity between the income of men
    and the income of women. Recently, a number of Senators and
    Members of Congress reintroduced the Paycheck Fairness Act,
    which has been introduced now 12 times since 1997, to try to
    help narrow that gap.
        I would assume that if we can also work as Members of
    Congress to narrow that pay gap, do what we can to make sure
    that women get the same pay as men, that is going to reap
    benefits down the road for women in retirement. Is that
    correct, Ms. Stone?
        Ms. Stone. Yes, because as I mentioned, many employer plans
    are based on somebody's earnings, and so higher earnings means
    a higher benefit, and also, if you are making more money, you
    certainly have more of an ability to put more money away in
    savings and get that employer match if they are offering that
    match.
        Senator Jones. It is not just for now. It is for the future
    when we are trying to do this, so thank you very much.
        I also want to--you know, I really appreciate the hearing,
    Madam Chairman, because I am witnessing an issue with my
    parents. My Dad worked at U.S. Steel and then had another job.
    He had a retirement U.S. Steel. He had Social Security, about
    as much as he could make for his generation. He is 87. My Mom
    worked sporadically, did not do a whole lot, but they planned.
    They thought they had a very good plan. They were putting money
    aside. They took some money from an investment and paid off
    their mortgage. What they did not anticipate, though, was Dad's
    Alzheimer's and having to go in extended care. They are both 87
    years old now, and their savings is dwindling rapidly because
    of that.
        What can we do for people that are just the young people--I
    agree. Impulsively, I bought a similar car, but I bet mine is
    sharper than yours is, so I can relate. What can we do not just
    for the young folks of today, though, but for those folks that
    are 45, 50 years old that are also making these decisions, what
    can we do to educate so that they can understand that we are
    living longer and that we have got to make sure that we plan
    for that old age that may not be a healthy old age, that they
    are not just going to live to a point where they all of a
    sudden get sick and die and leave everything to their spouse or
    their families? What can we do to help those folks right now,
    educate them about the need for putting money back as much as
    they can, and looking at their monthly income, not just their
    bottom line: ``Oh, I have got half a million dollars.'' You
    know, that is awesome, but where is that going to be and how
    long might that take to--I will leave that to the panel. Any
    suggestions on that?
        Ms. Stone. Well, I will just start with one comment because
    you mentioned especially with everyone being in savings plans
    now, people do not know how much to save and how much is going
    to be enough, because in the world of Social Security, you get
    a fixed amount a month. If I am saving something, how do I know
    how much money it is really going to take at 65 to be able to
    support the rest of my life? And if I have that lump sum, how
    do I know how much to spend each year? And you are right that
    there is definitely not enough planning around long-term care.
    People somehow still think that that is taken care of by
    Medicare.
        I think truly what is happening is, generationally, people
    who had to deal with their parents get a real wake-up education
    fast, and you hope they change their own behaviors going
    forward, because they are learning through their parents and
    their friends' parents what the story is and how much money
    this really takes.
        I think more education and information to people who are in
    savings plans about how that lump sum actually translates into
    a monthly income can have people either feel good that they are
    saving enough or maybe realize, ``Oh, that is not very much. I
    better start putting some more money away,'' and try to incent
    some savings behaviors.
        Senator Jones. Right. Anybody?
        Mr. Dodaro. I think financial literacy is a real issue in
    this country, regardless of age. Recent surveys from the
    Federal Reserve shows on five basic questions about financial
    matters, people get three out of the five wrong, if not more,
    and so this is a real issue, and many people, four out of ten
    people, cannot even cover a $400 emergency now, and so I think
    on financial literacy, the Government has a role here to help
    empower people.
        The federal government tries to do that through Social
    Security agents, IRS agents, and others, but people do not have
    enough of a resource, and so I think education has to go a long
    way, but the other thing I would say, is that we have called
    for a commission to look comprehensively at retirement security
    in the United States. One of the fundamental precepts that I
    think needs to be done is Congress needs to simplify the
    system. It is way too complicated, and continuing to make
    incremental changes make it even more complicated, so unless
    you both educate and bring up financial literacy and better
    simplify the system, I do not think there is going to be enough
    headway made in time to help people.
        Senator Jones. Great. Well, thank you very much. Real
    quick. I am out of time. Mr. Scott, do you want to say
    something real quick?
        Mr. John Scott. Well, I would just say that, in line with
    the comment about a reexamination of the whole system, I think
    that would help elevate the issue and help understand that, you
    know, your private retirement savings can affect your Social
    Security benefits, so you could use part of your private
    retirement savings for a year, delay claiming of Social
    Security, and increase your benefits by 7 or 8 percent, so I
    think that sort of comprehensive conversation would be really
    useful to a lot of folks, and, just briefly, we have a lot of
    new technology coming online, robo-advisers and artificial
    intelligence, that could help simplify and get the message out
    there to help people through these complicated decisions.
        Senator Jones. Great. Thank you.
        Thank you, Madam Chairman.
        The Chairman. Thank you.
        Senator Braun?
        Senator Braun. Thank you, Chairman.
        I am going to give you an idea what I think besets the
    whole system, and then I have got a couple questions at the
    tail end of it. To me, largely what pales the fact that people
    are not preparing for their future is the underlying ethic of
    savings. You know, I come from an area where it is kind of
    inherently frugal, a German, Catholic community and you were
    taught early on, even out of your wages you made mowing grass
    or something, stick some in the cookie jar or save it. I have
    had a business for 37 years and have been all about the idea of
    trying to make life better for my employees through all the
    tools we have, so I want to come back to a question later about
    the historic--the evidence on how that has changed in terms of
    how people view savings versus consumption.
        The tools we have got to address this would be Government,
    and I look at a statistic here that one-third of the budget was
    being spent on seniors through health care and Social Security
    in 2005. That is going to be 40 percent in 2029. We are running
    trillion-dollar deficits. We have got a balance sheet that
    looks terrible. You know, I come from a finance background. We
    are probably in the poorest position ever as a Federal
    Government to take on big issues like shoring up Medicare and
    Social Security, let alone things like infrastructure.
        I am thinking that one thing that occurred recently was tax
    reform, and for any of us that have had businesses--and I
    preached this on the campaign trail and have done it here--I
    think it is incumbent upon employers to make sure you not only
    expose savings opportunities to your employees, but you
    actually raise 401(k) benefits, invest--if you are a successful
    business and you are paying taxes, invest in your employees,
    because I think the reference was made that real wages have not
    been doing well. I think we are seeing some of that because we
    are unleashing part of the economy that I think can be
    unleashed, but we have got many years to go before that really
    sinks in.
        I am challenging folks that I think have businesses that
    are in the real economy out there to wake up, especially if you
    are successful, invest more in your employees. I do not feel
    confident in looking to Government in its current form of not
    living within its means as being a solution--not to say that we
    should not try to improve there.
        I want to circle back to the ethic of savings. I was
    looking through the notes. I was not here for most of the
    testimony. How much of what we suffer from now where people do
    not seem to be prepared for the future, knowing that Social
    Security has got a lot working against it actuarially and
    demographically, what can you tell me--and this is addressed to
    anyone that would have a special insight into it. What has
    happened since World War II in terms of savings and the fact
    that we obviously are a consumer society--I do not think there
    were credit cards around back then. How much of it is related
    to that versus the fact that, you know, we now see that it is
    not working through Government programs and businesses maybe
    need to do a little more? Anybody that would want to jump in,
    please.
        Mr. Dodaro. I have a chart in my prepared testimony that
    shows the national savings rate and how it has declined over a
    period of time, and it hit a low around the Great Recession
    most recently. It is back up to 6.8 percent, but is nowhere
    near historic levels, so there is a national savings issue that
    needs to be dealt with, but which has a lot of ramifications
    for capital formation and other things beyond retirement.
        Senator Braun. What was it historically, just out of
    curiosity?
        Mr. Dodaro. I think it was around 13 to 15 percent in the
    early 1970s, and now it is about half that.
        Senator Braun. Isn't that the plug-in variable?
        Mr. Dodaro. It is part of the issue. I do not think it is
    totally the issue, but I think it is part of the issue. I think
    another part of the other issue, though, that has to be part of
    the discussion is health care costs. Health care costs are
    eating up into a lot of people's ability to save at all levels.
    As long as health care costs continue to rise faster than the
    economy, which they have, that is going to impede any progress
    for people to try to make accumulate savings.
        Another part of the issue is that because of our economic
    model, a lot time has been spent encouraging people to spend.
    Consumer spending is one of the main drivers of our economy, so
    there is this tension between encouraging people to spend to
    promote economic growth and encourage them to save and deal
    with rising health care costs, so it is complicated, but the
    savings issue is part of the equation.
        Senator Braun. I am glad you mentioned health care costs.
    Another thing we did 9 to 10 years ago in our own business is
    the health care industry, specifically health insurance
    companies, totally dysfunctional. There is a really, I think,
    strong opportunity there to start growing costs out, because I
    think between health care costs and somehow figuring out how to
    get people to save more, look more to the future, would be the
    two things outside of Government that might make the most
    sense.
        Thank you.
        The Chairman. Thank you.
        Senator Sinema?
        Senator Sinema. Well, thank you, Chairman Collins and
    Ranking Member Casey, and thank you to all of our witnesses.
        You know, 10,000 Baby Boomers reach retirement age every
    single day, and many are unprepared for the financial
    challenges they face. An increasingly common challenge is how
    to balance retirement needs with caregiving obligations.
        Recently, a 2018 report from the Center for Retirement
    Research found that more than 10 percent of adults ages 60 and
    over provide some type of care to their own elderly parents,
    and that is what happened to Norma, who is an Arizona educator
    who took early retirement at age 61 to first care for her
    father and then later for her mother, and it also happened to
    Larry, who is an Arizonan with a successful career in
    marketing. He became his mother's caregiver and found his bills
    piling up. In his 70's, he had to take on part-time, low-wage
    work just to make ends meet.
        We know that preparing for retirement is challenging enough
    for many Americans, and those challenges are exacerbated when
    retirees also care for their aging family members. While this
    is often a choice that is made out of love, it can impact
    employment and even Social Security benefits if the caregiver
    must spend years working outside of the working.
        My question today is for Ms. Linda Stone with the Women's
    Institute for a Secure Retirement. Your testimony mentioned
    that retirement protections for caregivers within the Social
    Security system exist, and I previously supported legislation
    to provide tax credits to caregivers, but designing a caregiver
    retirement benefit would be more complicated, so how can we
    shift the conversation around caregiving from talking about it
    as a familial obligation to instead recognizing it as work,
    especially in the context of lost wages and the impact that it
    has on lifetime earnings? And how can we design an earned
    benefit to ensure that it reaches workers like Norma and Larry
    who have made these choices to care for their family members?
        Ms. Stone. I appreciate your questions and your raising
    situations that we hear about a lot at WISER and, you know,
    women having to make these choices, as you said, and the
    ramifications of that. You know, I think from a policy
    perspective, that is not WISER's expertise, so I will leave
    that to all the actuaries and other policy experts around
    Social Security. I will only say that, you know, knowing the
    facts that people do have to spend this many years working but
    not working within work for the Social Security system is
    something that, you know, I would agree needs attention and
    evaluation for how to address that because it definitely
    impacts the ability of large groups of people to be able to
    have a good Social Security benefit as well as to continue
    working to be able to save and get retirement benefits.
        Senator Sinema. My own aunt took early retirement in order
    to have more time to care for my grandmother, who suffers from
    Alzheimer's, and while she still works part-time outside of the
    home, she now is facing a smaller long-term Social Security
    benefit because of the choice she was forced to make in order
    to care for my own grandmother.
        The stories that I hear from Norma, Larry, and, indeed, in
    my own family continue to build and show the pressure that
    Arizonans are facing in the sandwich generation, caring for
    both younger family members and older family members.
        What kind of conversations are happening within the private
    nonprofit community as well as in Government structures to help
    realistically make adjustments for family members who are
    making these very difficult decisions to reduce their
    unemployment to care for family members?
        Ms. Stone. Really, I am sorry. I really cannot speak to
    that.
        Senator Sinema. Are there other members of the panel who
    might be able to address the issues of how to construct a
    benefit that would allow individuals who have taken time off of
    paid work to care for family members to retain the relevance of
    their work in Social Security?
        Mr. John Scott. I would just say that, you know, at Pew a
    different project other than mine is looking into caregiving
    issues, and we would be happy to followup with any information
    we can provide.
        Mr. Dodaro. At the request of Chairman Collins, we are
    doing work for this Committee now looking at this very issue of
    people providing caregiving and what the implications are for
    work. When we have completed our work, we plan to have some
    suggestions in that report associated with that.
        Also, I think more conversation needs to be had. We have
    called for a national commission to be chartered by the
    Congress to look holistically at retirement security in the
    United States. The current system is not well prepared to meet
    21st century needs, and that would be part of that
    conversation, too, so that it could be looked at holistically.
    I think we need to address it more comprehensively, but that
    issue would definitely be part of the conversation.
        Senator Sinema. Thank you.
        Mr. Chairman, I yield back.
        The Chairman. Thank you.
        Senator Hawley?
        Senator Hawley. Thank you very much, Madam Chair, and
    thanks to all of you for being here today to help us understand
    this very important issue.
        I also want to talk about the costs of caregiving, but I
    want to ask some questions about caregiving for children and
    how that affects families' abilities to save and plan for the
    future, but first, let me just pick up on Senator Sinema's
    questions, which I thought were very good and whose concerns I
    share.
        Ms. Stone, in your prepared testimony, you talk about the
    possibility of a provision for Social Security credits for
    those who take significant time, women in particular who spend
    significant time as caregivers. Would you like to say more
    about that? I think that is a very--I think Senator Sinema was
    asking about this. That is an important proposal.
        Ms. Stone. Yes. Well, as I mentioned, I am not getting
    detailed into the policy. WISER and myself was making this
    statement only in that the fact exists, here is what happens
    with women who are taking time out of the workplace to care for
    children or older parents and how can the system address that
    fact without going into any policy details. That is not my area
    of specialty.
        Senator Hawley. Just to pick up on that, it seems to me
    that when we think about care for children, this is a
    significant reason, we know from the data, that women in
    particular choose to, as you say in your prepared testimony,
    Ms. Stone, that women choose to opt for more flexible workforce
    options. They are often still the primary caregiver for
    children, and that, of course, has significant implications for
    savings, and the cost of raising children has significant
    implications for savings.
        I want to ask--I will start with you, Ms. Stone, but direct
    this to the panel. Are there steps that can be taken that we
    should be considering to bring down the costs of raising
    children that would allow for greater savings for families in
    prime earning years when they perhaps have one spouse who has
    reduced his or her workload or is staying home completely to
    care for children and, therefore, their income is down for that
    reason, and just the costs of raising children which continues
    to grow? Are there proposals that you think we ought to be
    looking at to bring down those costs that would allow families
    to save? Ms. Stone, we will start with you and just go down the
    line.
        Ms. Stone. Yes, I am really not aware of anything.
        Mr. St. Peter. I can just speak from an employer, and we
    try to provide as much flexibility to our employees to take
    care of children or elders. We have parameters that we have
    to--with our 401(k) we have parameters of eligibility, and if
    there is--and I do not know exactly what those are, but if
    those could stay within the 401(k) and still be eligible, that
    may be a minor step in the process, but I think just in
    general, trying to be a good employer and provide them as much
    flexibility as we can.
        Mr. John Scott. Well, as a father, I can certainly
    appreciate the question, and I would just repeat that I do not
    really have any specifics to offer today, but this is an issue
    of importance to Pew. It is something that we are studying,
    paid and unpaid care for both children and older parents and
    close ones, so it is something we would be happy to followup at
    a later time when we have some more data.
        Mr. Dodaro. Our current work for this Committee is focused
    on caregiving for parents and spouses, not on children at that
    point, so I would be happy to take a look at that in the
    future, but one of the big issues from a Government standpoint,
    most of the assistance has been provided in the form of tax
    credits, and also the whole issue about education. I think the
    student loan issue not only a parent but a grandparent of seven
    now, I am trying to help my grandchildren prepare for college,
    and that is a huge cost, so there are costs of raising
    children, and there are big costs, and those big costs come
    later on.
        Of course, you have the Medicaid program that allows
    children--you have the CHIP programs for health care costs,
    which are a big component of costs of raising your children if
    you confront a health issue.
        The Federal Government has a lot of issues, but I
    commissioned a special study on was all the programs to help
    children. I am very concerned, as I am with retirement
    security, with the number of children in poverty. The federal
    government does not have a coordinated, comprehensive,
    governmentwide focus on children generally. You are bringing up
    one aspect of that issue in terms of caregiving and the
    implications for the parents, but we have one in five children
    in poverty in this country. In fact, there are more children
    probably in poverty now than the elderly people, and so this
    issue needs a lot broad examination.
        Senator Hawley. Thank you for that. I would just say I am
    very concerned about the number of children in poverty, and as
    it bears on the subject of today's hearing, it seems to me that
    the costs of raising children both in child care and early
    years, the cost of lost income from a spouse or spouses who
    have to stay home or balance the workload that way, and also
    the costs of education is a very significant--I know from
    people in my State whom I have talked to, for families in my
    State, the rising costs of raising children and educating them
    and their health care and their child care is a significant
    barrier to savings that we then see manifest later in life when
    they find they have not been able from their private savings or
    from participation in the workforce to be able to do what they
    would like to do.
        At the same time, of course, we know that the reduced
    number of children, the reduced birth rate, has follow-on
    effects generations later in terms of the number of people we
    have in the workforce who are then able to support those who
    are retired and to support our important programs like Social
    Security and Medicare, so there is a bit of a Catch-22 here
    that I think we are coming to a reckoning with as our society
    ages, as the number of children born to us declines, and as the
    cost of raising children goes up, so these are issues that I
    would like to see us continue to address.
        Thank you all for the important work you are doing, and
    thank you, Madam Chair.
        The Chairman. Thank you.
        Senator Blumenthal?
        Senator Blumenthal. Thanks. Thank you, Senator Collins.
        I want to come back to Social Security, one of the key
    pillars of any retirement financially, and roughly half of
    seniors rely on Social Security for 50 percent of their income.
    One in five rely on it for 90 percent. Women are even more
    dependent on it generally than men, and many are living in
    poverty, but the news is not great looking to the future. As
    you say in your report, by--and I am going to read it to get it
    right, ``current projections indicate that by 2034, the Old-Age
    and Survivors trust fund for Social Security's retirement
    program . . . will only be sufficient to pay 77 percent of
    scheduled benefits . . .'' That is a really startling
    statistic, and it is not sort of, well, if everything goes
    right or wrong. That is the reality, and for the first time, in
    2005 Social Security is paying out more than it is taking in.
        We are talking about all kinds of issues here that involve
    education and awareness and savings, but one of those key
    pillars very much within our direct control is Social Security,
    so the question is: What do we do?
        I have introduced legislation--it is called ``Social
    Security 2100"--along with Chris Van Hollen, my colleague here;
    John Larson in the House. We have really developed a complex
    and I think sophisticated approach that, in effect, increases
    the benefits that are going to be received to keep pace with
    the cost of living, not to reduce it. Far from it, to increase
    the benefits, but at the same time make it financially solvent
    through a series of changes in the tax structure and raising
    taxes, in effect, for people who earn more than $400,000--I am
    not going to ask for a show of hands here, but my guess is a
    very small number in this room and generally in the American
    public make more than that amount--and really to update the
    Social Security system.
        I would like to hear from the panel--after that somewhat
    long-winded introduction but incomplete because there is a lot
    more to say about Social Security--what you think about the
    importance of this kind of reform.
        Mr. Dodaro. I think it is essential to reform the Social
    Security system. I mentioned that the Social Security Old Age
    and Survivors Trust Fund will have only enough to pay 77
    percent by 2034, but just to give you an idea of the magnitude
    of the issue, the net present value, the difference between
    expected expenditures for Social Security and revenues coming
    in over the next 75 years is $16.1 trillion, expenses over
    revenues, so you would have to make up that amount of money.
    Another way of looking at it, you would have to increase
    payroll taxes by 2.84 percent to cover that gap.
        There are obvious policy decisions. There are benefits
    versus revenues, but you have a very significant issue here,
    and then if you think about in the Medicare program net present
    value of the projected deficity over the next 75 years is $38
    trillion, so if you look at Social Security and Medicare
    combined, the program is facing a $54 trillion deficit in
    funding for those programs based on their current arrangements
    over the next 75 years. This is a huge cost, and there are
    alternative estimates for Medicare, if health care costs go
    higher, that number could go even higher over that period of
    time.
        This is one of the factors driving the overall deficit
    situation in the Federal Government. Right now, as of Monday,
    the national debt stood at $21.9 trillion, and the interest
    costs on that debt are rising and by 2028 it is projected to be
    over $900 billion a year just paying interest on the debt, so
    there is a very serious long-term fiscal problem, and Social
    Security and Medicare are a central part that need to be dealt
    with in order to deal with this situation.
        Senator Blumenthal. Well, I would just point out, because
    my time has expired, put aside the Federal deficit, I am deeply
    alarmed about it. A number of us have raised important
    objections to the so-called tax reform to deficit spending in
    the budget because of it, but Social Security is a trust fund,
    and we have an obligation to make it solvent, and the costs of
    living, apart from the cost of medicine alone--and maybe we can
    do more to bring down the cost of pharmaceutical drugs and
    other costs of health care, but the cost of living we know is
    going to rise, and right now a lot of seniors will not be able
    to rely on Social Security to stay out of poverty, and I think
    that is something very much within our control. We need to
    address it now.
        Mr. Dodaro. I agree.
        Senator Blumenthal. Thank you.
        The Chairman. Thank you.
        Mr. Dodaro, I want to followup on a Social Security
    question also. Increasing the minimum Social Security benefit
    may be one option that Congress should examine to protect low-
    income beneficiaries who have little else to live on. I was
    surprised, as I started looking into this concept, to learn
    that the Social Security Administration's distribution analysis
    showed that raising the minimum benefits could also raise the
    benefits of many who are not actually low-income because they
    may, for example, be married to a high-earning spouse.
        Do you have any thoughts preliminarily on what could be
    done to ensure that any increase in the minimum benefit, which
    I am inclined to think is a good idea, is targeted to just low-
    income beneficiaries and that it does not have this impact that
    we see in the analysis that SSA has done?
        Mr. Dodaro. I would be happy to take a more detailed look
    at that and give you some more detailed suggestions, but
    preliminarily, in our look at this issue, one of the key
    issues, I think, would be to try to understand from Social
    Security how many people actually receive the minimum benefit.
    It has been a number of years since we looked at that issue,
    but the last time I think it was 2013. There were very few
    people who were at the minimum benefit. Most people with a
    spousal benefit, assuming your spouse did the right thing and
    you had that option, have a much higher beneft than the minimum
    amount.
        I think the first thing to do is where should the minimum
    be if you want to adjust the minimum to make a meaningful
    difference. Then once you do that, the analysis that we have
    looked at quickly for Social Security shows that there are some
    high-income earners who would benefit from this, particularly
    those that have investment income, and so the difference would
    be to try to focus on earnings versus total income as a means
    of trying to keep it more targeted to the lower-income people,
    but we can study this a little bit further and give you some
    suggestions in that area, but those are two things I would
    suggest.
        The Chairman. Thank you. That is very helpful, and I
    appreciate your offer to do some additional work for us in that
    area.
        Mr. Scott, you discussed the challenges facing workers
    without employer-sponsored plans, and, understandably, it tends
    to be smaller businesses that are less likely to offer these
    plans.
        What does your research show would prompt smaller employers
    to offer retirement plans?
        Mr. John Scott. That is a really, really good question and
    an important question, because we do know that the coverage is
    very low among small employers. I think the focus we have seen
    from our research is on the high cost of starting a plan, the
    sort of lack of internal administrative capacity or bandwidth
    to operate a plan. These are business owners who are, you know,
    doing more than one thing with their companies, and I think
    also just the lack of awareness of plan options. As I said in
    my testimony, only 11 percent are very familiar with SIMPLE
    plans and other options that are specifically designed for
    small business. Many are not aware of the existing tax credit
    for startup costs.
        I think there are a number of things in terms of just
    raising awareness and helping them--you know, giving them the
    tools to start plans. You know, in our conversations in focus
    groups of small business owners, they want to do the right
    thing. They want to help their employees save for retirement.
    They told us that repeatedly, but I think they really just
    need--you know, so the motivation is there. I think they really
    just need the tools and awareness of what is available to them
    that works for their business.
        The Chairman. Thank you.
        Mr. St. Peter, you have illustrated how in just 10 years
    your company really transformed its retirement savings options
    for your workers, and it is a remarkable success story for a
    business that has only about 100 employees. That, by the way,
    in Maine is a pretty good-sized business, but from your
    perspective on the ground, how can we encourage other small
    employers to take the same kind of steps you did to offer
    matching contributions, which seems to have been the key in the
    transformation of your plan, and take other steps to offer
    retirement savings programs?
        Mr. St. Peter. Yes, I agree with you. I think our matching
    component of the best practices that we implemented was the
    reason we were so successful. Any incentives that you can
    provide to businesses, tax-wise or other, education---I think
    education and outreach is really important, so I am not sure
    what the best instrument is there, but utilizing local Chambers
    of Commerce or other organizations that are in place.
        I really like what I heard about the multiple-employer
    plans and removing the nexus requirement, I think that would go
    a long way. Within our engineering consulting industry, we have
    at least one association we could use for a multiple-employer
    plan, but if you remove that nexus requirement, you get someone
    like a Chamber of Commerce or other entities that are already
    in place to form some of these multiple-employer plans, I think
    that would go a long way.
        The Chairman. Thank you very much.
        And, Ms. Stone, your testimony was excellent. I deferred to
    Senator Casey to lead the questioning on you, but I do
    appreciate your testimony as well.
        Ms. Stone. Thank you.
        The Chairman. Senator Casey.
        Senator Casey. Thank you, Chairman Collins. I will actually
    ask a similar question or along a similar line about access to
    retirement plans that work.
        Ms. Stone, we know that is a problem, obviously, for part-
    time workers as one category; small employers, as Mr. St. Peter
    was talking about, and the ways he and his company have
    confronted this challenge. Workers in low-wage industries might
    be another example.
        Can you speak more to how difficult it can be for workers
    with no access or very limited access to workplace retirement
    plans to save and how we can bring more workers into workplace
    plans, how that could help?
        Ms. Stone. Well, I think, as you mentioned, it is very
    difficult for somebody who does not have access to a workplace
    plan to try to figure this out for themselves, even if they
    want to save. You know, what is an IRA? How do you do that? Can
    I trust that person? How do I pick the investments? There is
    something about the structure of a workplace plan that gives
    people more assurance as well as providing the means and,
    frankly, the discipline to do ongoing savings.
        We know from some of the work that WISER has done with
    child caregivers in Appalachia, so very, very low-income women,
    that if you give an incentive to save and put something in
    place, they want to save. You know, women want to save, and so
    I think it is getting to the access to a plan. There is, what,
    30 percent--we heard some numbers today--of private sector
    employees who have no access to a workplace retirement plan, so
    if something could be put in place that they would have access
    and also perhaps to reflect the fact that many women are
    working part-time and that cuts them out of participating in a
    plan that has a thousand-hour requirement, can we do something
    to change those participation requirements so women who are
    working perhaps consistently on a part-time basis can have
    access to a workplace plan and be able to save?
        Senator Casey. The last question was about more of a
    demographic focus. I think it is still the case that the
    fastest-growing population is 85 and up overall, and in your
    testimony you talked about that there are 5.7 million more
    women than men at age 65, but you also said 67 percent of the
    over-85 population are women, so basically two-thirds of
    everybody over 85 is, in fact, a woman.
        I have introduced legislation the last Congress--actually,
    Senator Wyden and Senator Brown and I introduced a bill that
    would strengthen Social Security benefits for the oldest among
    us and for those receiving particularly low benefits. Walk
    through, if you can, both the risks and the challenges that
    face retirees, especially those who live to that advanced age.
        Ms. Stone. Well, as I had mentioned, when you are over 85,
    most of those--the majority of those folks are women. Many of
    them at that point are alone and living alone. They are not
    married at that point, and so they have spent time caregiving
    for their spouses, oftentimes using up the assets, the savings
    that they did have, and so when it comes time for their time,
    you know, it is less likely that there is a family person to
    take care of them, so they have to pay for assistance, and we
    also heard mention today, you know, of the cost of long-term
    care and what that can do to somebody's financial security when
    you have a shock like that that is unexpected, and so it is
    this group that is most likely to end up in poverty, and what
    was telling to me was they end up in poverty even though they
    have not been poor or near-poor in their life. It is just the
    circumstance of the longevity and no one expecting to live that
    long and not being able to plan to live that long, having very
    low Social Security benefits, and, frankly, at that point
    little or no assets to draw upon.
        Senator Casey. Thank you.
        Thank you, Madam Chair.
        The Chairman. Thank you.
        Senator Braun?
        Senator Braun. Thank you, Madam Chair.
        Senator Blumenthal mentioned Social Security. I think that
    is so important because it is a structural thing that most
    people end up depending on when it comes to retirement. I
    disagree with the fact that--you know, he was talking about
    raising revenues. As an employer and knowing what the
    percentage is currently that employees and employers pay into
    it, I think you are going to have a tough time having that
    sell. You know, he mentioned tax reform. That, according to
    CBO, was, I think, $150 billion per year, $1.5 trillion over 10
    years, and in the Budget Committee the other day, I asked
    Director Hall, and he said, you know, he did not agree with the
    fact that it is revenue neutral so far, but he said you at
    least need to look at the fact when you are growing 3 percent,
    tax reform, you know, might be closer to neutral than negative
    on the deficit--my point being it goes back to employers, you
    know, having that extra capacity paying less to the Federal
    Government, so I think anybody out there that is an employer,
    look at enhancing your 401(k). Take on your health insurance
    issues. We did it. You could lower costs dramatically, but you
    have got to take risks and have the nerve to do it, lowering
    health care costs, which is such a big deal because the
    Medicare component was as lot larger than Social Security, so I
    think that those are the angles that are going to work better
    than what the Senator was referring to.
        Here is something in health care. Senator Paul has talked
    about it, I believe it is necessary: pooling and associating so
    you do not have individuals stranded out there with the poorest
    buying power possible to try to get, you know, good advice and
    any of the economy of scale that would come from having 300,
    500, 1,000 employees.
        Is pooling and association, which has been kind of loath
    for health care to embrace, which they should? What about
    financial services? Maybe Mr. Scott or whoever would have some
    knowledge. Is that percolating out there to help individual
    folks planning for retirement?
        Mr. John Scott. Yes, I think there is a lot of interest in
    taking a pooled approach or an association approach to
    retirement savings, offering retirement benefits through sort
    of a pooled approach. I think, you know, in our polling, our
    survey work around the issue, we did raise the topic of
    multiple-employer plans, which is one pooled approach, and
    there is a lot of interest in that. A lot of the small business
    owners expressed or said that it would be very useful to them
    if they could sort of join in a multiple-employer plan.
        Of course, it is still voluntary. They still have to sort
    of make that decision individually if it makes sense from a
    business perspective to join in, so it is not clear if they
    will at the end of the day, but I think that is certainly an
    important option to be considered.
        Senator Braun. Do you see much of that happening out there?
    Is the impetus going to have to come from employers to push it?
    Or do you think the financial services industry will reach out
    to what to me looks like a big market to try to get an economy
    of scale there?
        Mr. John Scott. Yes, it is a really good question. I think
    Mr. St. Peter mentioned that, you know, there is some interest
    within the Government in terms of expanding the opportunity to
    join in multiple-employer plans, so you know, we are looking to
    see if there will be any guidance from the Department of Labor
    on this particular issue.
        Then, of course, it is a question of whether the financial
    services industry will put together the products. You know,
    retirement plans are sold to employers, so they will have to
    follow through on their end to construct pooled products that
    make sense for the individual business owner.
        Senator Braun. Thank you. Anybody else want to weigh in? Go
    ahead.
        Mr. St. Peter. Just a couple things. We have acquired some
    small firms in the last 5 years. Two of them had SIMPLE plans;
    one of them had a 401(k) profit plan, I think underachieving
    the success that we are having now, now that we are bigger,and
    then on health care, we did pool with our association, ACEC,
    and it was very successful for us for many years for our health
    care insurance.
        Senator Braun. When did you start that?
        Mr. St. Peter. It was probably 5 years ago. The funny thing
    is we did just opt out of it to another plan, but during those
    5 years, it was very successful for us.
        Senator Braun. Measurable cost savings by doing it?
        Mr. St. Peter. Very, very much.
        Senator Braun. Good.
        Mr. St. Peter. We have also implemented--not the H.R.
    director. We share deductibles. I think it is HRA, so it is a
    bit of self-insuring ourselves. We have higher-deductible
    plans, HSAs with an HRA to help share the cost of that
    deductible and out-of-pocket expense, and that has been very
    successful for us, too.
        Senator Braun. Good. I am out of time. I yield back.
        The Chairman. Thank you so much.
        I would like to thank all of our witnesses for testifying
    today and sharing your analysis, recommendations, and insights
    on how Americans can better prepare for a secure retirement
    today and for generations to come. Your ideas, your expertise,
    your knowledge is extremely valuable to our Committee as we
    continue to work on how we can improve retirement security for
    all Americans.
        I believe that this is an issue that Congress must grapple
    with, and yet it really has not received much attention despite
    all the red flags and warning signs that we are seeing.
        This week, as I mentioned in my opening statement, I
    introduced two bipartisan bills that would better promote
    greater retirement security. Together, the Retirement Security
    Act and the SIMPLE Plan Modernization Act would encourage more
    employers to offer retirement plans and provide incentives for
    employees to save more for their own retirements.
        The frustration that I feel is we know this crisis is
    looming. We know that the three traditional pillars of our
    system--Social Security, pension plans, and personal savings--
    are all three on very shaky ground, and yet it is an area that,
    because it is so difficult, Congress has tended to shy away
    from tackling what is a very important challenge, particularly
    given the changing demographics of our country with people
    living far longer and our population growing older.
        This will remain a major focus of our Committee. I
    appreciate the work that Senator Casey has done as well, and I
    want to thank our staff, which has done an excellent job in
    putting together this hearing. That is always key to a
    successful hearing.
        Committee members will have until Friday, February 15th, to
    submit any additional questions for the record, so some may be
    coming your way. I appreciate the fact that many of you have
    offered to keep in touch with the Committee and continue to
    assist us with our work on this important topic.
        Senator Casey?
        Senator Casey. Thank you, Chairman Collins, for the hearing
    on this critical issue.
        We have heard from our witnesses about our Nation's
    retirement system that works well for some but, as I said
    earlier, lets many others fall through the cracks. We do have
    to work together, as the Chairman said, to address the
    shortcomings of our retirement system. Part of that, of course,
    is strengthening Social Security and ensuring it keeps the
    promise of financial security in retirement. Part of that I
    think would be passing legislation like my bill to help both
    widows but also widowers because of the arcane and destructive
    claiming rules and other problems with the system.
        We have got to take action to ensure that workers depending
    on pensions that they have earned are not left struggling to
    make ends meet in their retirement years. We have got to work
    to improve access to retirement plans and to Government
    incentives to save so that our retirement system is serving
    every worker and not just some.
        So we look forward to continuing this work, and I want to
    thank our colleagues on the Committee, Chairman Collins, and
    also, of course, our witnesses for being here. Really a good
    education for all of us.
        Thanks very much.
        The Chairman. Thank you. This hearing is now adjourned.
        [Whereupon, at 11:14 a.m., the Committee was adjourned.]

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                                    APPENDIX

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                          Prepared Witness Statements

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                           Statements for the Record

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