    [Senate Hearing 117-109]
    [From the U.S. Government Publishing Office]

                                                           S. Hrg. 117-109

                         BUILDING WEALTH AND FOSTERING
                             INDEPENDENCE: CREATING
                             OPPORTUNITIES TO SAVE

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

                                    HEARING

                                   BEFORE THE

                           SPECIAL COMMITTEE ON AGING

                              UNITED STATES SENATE

                        ONE HUNDRED SEVENTEENTH CONGRESS

                                 FIRST SESSION

                                   __________

                                 WASHINGTON, DC

                                   __________

                                 JULY 15, 2021

                                   __________

                               Serial No. 117-05

             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
    45-315 PDF                 WASHINGTON : 2021

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

                           SPECIAL COMMITTEE ON AGING

                  ROBERT P. CASEY, JR., Pennsylvania, Chairman

    KIRSTEN E. GILLIBRAND, New York      TIM SCOTT, South Carolina
    RICHARD BLUMENTHAL, Connecticut      SUSAN M. COLLINS, Maine
    ELIZABETH WARREN, Massachusetts      RICHARD BURR, North Carolina
    JACKY ROSEN, Nevada                  MARCO RUBIO, Florida
    MARK KELLY, Arizona                  MIKE BRAUN, Indiana
    RAPHAEL WARNOCK, Georgia             RICK SCOTT, Florida
                                         MIKE LEE, Utah
                                  ----------
                     Stacy Sanders, Majority Staff Director
                     Neri Martinez, Minority Staff Director

                            C  O  N  T  E  N  T  S

                                  ----------
                                                                       Page

    Opening Statement of Senator Robert P. Casey, Jr., Chairman......     1
    Opening Statement of Senator Tim Scott, Ranking Member...........     3

                               PANEL OF WITNESSES

    Thomas Foley, Executive Director, National Disability Institute,
      Washington, D.C................................................     6
    Rodney Brooks, Retirement Columnist and Author, Silver Spring,
      Maryland.......................................................     7
    Josie Badger, Ph.D., Campaign Manager, #IWantToWork, New Castle,
      Pennsylvania...................................................     9
    John Iacofano, Owner, Iacofano's Catering, Mount Pleasant, South
      Carolina.......................................................    11

                                    APPENDIX
                          Prepared Witness Statements

    Thomas Foley, Executive Director, National Disability Institute,
      Washington, D.C................................................    29
    Rodney Brooks, Retirement Columnist and Author, Silver Spring,
      Maryland.......................................................    32
    Josie Badger, Ph.D., Campaign Manager, #IWantToWork, New Castle,
      Pennsylvania...................................................    36
    John Iacofano, Owner, Iacofano's Catering, Mount Pleasant, South
      Carolina.......................................................    40

                         BUILDING WEALTH AND FOSTERING
                             INDEPENDENCE: CREATING
                             OPPORTUNITIES TO SAVE

                                  ----------

                            THURSDAY, JULY 15, 2021

                                           U.S. Senate,
                                    Special Committee on Aging,
                                                        Washington, DC.
        The Committee met, pursuant to notice, at 9:37 a.m., via
    Webex and in Room SD-562, Dirksen Senate Office Building, Hon.
    Robert P. Casey, Jr., Chairman of the Committee, presiding.
        Present: Senators Casey, Blumenthal, Kelly, Warnock, Tim
    Scott, Braun, Rick Scott, and Lee

      OPENING STATEMENT OF SENATOR ROBERT P. CASEY, JR., CHAIRMAN

        The Chairman. The Senate Special Committee on Aging will
    come to order. I would like to welcome everyone to the Aging
    Committee's first hybrid hearing of this Congress, with members
    having the option to attend in person or online. Welcome,
    everyone.
        This hearing will focus on the challenges individuals face
    when working to achieve long-term financial security and save
    for a stable retirement. All Americans worry about their
    economic future, especially as we grow older. For people with
    disabilities, finances, savings, and income are especially
    worrisome issues. According to the Bureau of Labor Statistics,
    in 2020, across all age groups, people with disabilities were
    much less likely to be employed than those with no
    disabilities. The same report found that across all educational
    attainment groups, unemployment rates for people with a
    disability were higher than for those without a disability.
        Since people with disabilities are less likely to be
    employed and much more likely to be underemployed, their
    lifetime earnings are far less than the average citizen. Family
    members are often forced to quit their jobs to help care for
    other family members, family income has often been
    significantly limited.
        For these families, Congress has removed some of the
    barriers to saving and to planning for the future. The
    bipartisan Stephen E. Beck, Achieving a Better Life Experience
    Act, or as we know it by the acronym the ABLE Act, which
    Senator Burr and I led in the Senate when it passed in 2014.
    This act makes it possible for people with disabilities to save
    for the future. With an ABLE account, people with disabilities
    can save for the future without losing their Federal disability
    benefits such as Supplemental Security Income or Medicaid. With
    the opening of ABLE accounts in 43 states, over 91,000 people
    have been able to save over $759 million, an average of over
    $8,300 per account.
        These essential assets allow people to open their own
    businesses, save for retirement, purchase the technology they
    need, and so much more. That includes, in my home State of
    Pennsylvania, over 5,200 people who have used ABLE accounts to
    save over $57 million so far.
        One such Pennsylvanian is a member of our witness panel
    today, Dr. Badger, who will tell us how an ABLE account helped
    her buy her first home.
        ABLE has made building wealth a real possibility for
    millions of Americans but our work on this issue is not done.
    ABLE accounts are not available to all people with
    disabilities. To open an account, a person has to acquire their
    disability prior to their 26th birthday. This needs to change.
    Many people acquire their disability after age 26, including
    over 1 million veterans.
        That is why Senator Jerry Moran of Kansas and I, along with
    10 additional colleagues--four Republicans, six Democrats--have
    introduced Senate Bill 331, the bipartisan ABLE Age Adjustment
    Act. The bipartisan House version, which is H.R. 1219, has been
    introduced by Representatives Tony Cardenas and Judy Chu of
    California and Cathy McMorris Rodgers of the State of
    Washington. They have been joined by 39 Democrats and 20
    Republicans to help pass this important legislation.
        The ABLE Age Adjustment Act will provide 6 million
    additional Americans with disabilities with the opportunity to
    open an ABLE account. The ABLE Age Adjustment Act legislation
    is an important step toward a more stable economic future for
    people with disabilities. There remain other challenges which
    must be addressed. As we will hear today, barriers to economic
    also plague many communities of color. Higher levels of poverty
    and unemployment have made it more difficult to save long-term
    for many people from African American, Latinix, and other
    diverse communities. This is a disturbing set of numbers I am
    about to read.
        A 2020 report from the Federal Reserve, and that is
    obviously very recent, estimated that white families had eight
    times--eight times--the wealth of the typical Black family and
    five times the wealth of the typical Hispanic family. No one
    can be satisfied with those numbers. The same report has also
    found that the asset-based net worth of white households was
    more than four times the level of Black households. As a
    Nation, we have only begun to address the barriers to economic
    security for people with disabilities and communities of color
    as they age.
        I look forward to hearing from our witnesses today about
    these important issues and the progress we hope to be able to
    make.
        Before we begin, I want to remind Committee members and
    witnesses to please keep remarks and questions to five minutes.
    Following opening remarks, Senators will ask questions based on
    seniority whether joining in person or by camera virtually.
        Ranking Member Scott, I am pleased to turn it over to you
    for your opening remarks. It is great to see you in person.

         OPENING STATEMENT OF SENATOR TIM SCOTT, RANKING MEMBER

        Senator Tim Scott. Thank you, Chairman Casey.
        It is good to see you in person, as well. This is such an
    important Committee and we do good work under your leadership
    and I appreciate the way that you have handled the
    responsibilities of chairing this Committee and keeping our
    focus not on each other or each side but on the American people
    and specifically on seniors and folks with disabilities. It is
    really important for us to recognize that many of us are
    blessed. We are blessed to serve in the U.S. Senate on behalf
    of our states and on behalf of people who need help.
        One of the things I think about, Chairman Casey, as I
    ponder this conversation around retirement security is how
    fortunate we are to be in a position where we have retirement
    accounts connected to what we do. Many times folks who have 100
    employees or fewer do not have access to a retirement account.
    I know that is true here in Washington, DC. as well as it is
    true at home in South Carolina.
        Growing up in poverty has another impact on that wealth gap
    that you talked about, the difference between African
    Americans, Hispanic and white folks, the amount of net worth
    they have typically can manifest in the equity in a home. If
    you do not have access to home ownership because of challenges,
    then you are going to see that wealth gap only increase. As
    that wealth gap increases, we will see that have an impact on
    how comfortable you are in retirement.
        There are many pieces to the life puzzle of retirement that
    we will address today and I am thankful that we have an
    opportunity to do so. I am also thankful that, as a kid growing
    up in poverty, I had the chance of meeting a small business
    owner who was my mentor, who started teaching me about
    financial literacy at 15, 16, and 17 years old. That was a
    blessing that too many Americans do not have.
        Learning those lessons early in life allows for your
    retirement years to look very differently. Far too many
    Americans living paycheck to paycheck, including vulnerable
    populations facing poverty, and some with disabilities,
    retirement seems out of reach no matter how old you are.
        Too often, you see good people who have worked all their
    lives having to continue to work well into what we would
    consider your traditional retirement years.
        For others, there are obstacles such as keeping your
    retirement plan when you are switching jobs. Getting access to
    a retirement plan when working for small businesses, as I just
    mentioned, is harder to do. In South Carolina, approximately
    400,000 full-time employees do not have access to an employer-
    sponsored retirement plan. Two hundred thousand-plus South
    Carolinians who are working part-time do not have access to a
    retirement plan.
        African Americans disproportionately have less access than
    other folks. Employers are a critical major piece of this
    retirement puzzle. One of the ways that we can help this is to
    make sure that employers have an easier access to establishing
    retirement plans.
        As a former small business owner myself, I know the passion
    that we have for our extended families that we see as our
    employees. We see our employees as a part of our extended
    families. When we have an easier path to establishing and
    setting up retirement accounts for our employees, we look
    forward to that opportunity. We lean into that opportunity. It
    does solve a lot of problems. When you are making between
    $30,000 and $50,000 a year you are 12 times more likely not to
    be able to save for your retirement unless you work at a place
    where they have a retirement system there. Despite wanting to,
    small employers find it difficult and often impossible to
    provide retirement plans because of administrative burdens,
    startup costs, fees, and liabilities.
        There is good news, though. The SECURE Act signed into law
    in December 2019 makes it easier for small business owners to
    set up retirement plans that are less expensive and frankly,
    much easier to administer. Today we will have the good fortune
    of hearing from an entrepreneur, a South Carolinian, John
    Iacofano, who is launching his company's first retirement plan
    today. Wonderful. I am excited to hear from John.
        This new retirement plan is also the result of work by Matt
    Watson, a local advisory in Charleston who is helping small
    businesses across the State launch their own plans.
        We have wonderful examples throughout the great State of
    South Carolina of these folks taking advantage of a simpler,
    more effective way of providing for retirement security for
    their employees. Bitty and Beau's Coffee in Charleston is one
    of those great examples that comes to mind. This coffee shop
    specifically employs folks with disabilities, helping them
    achieve financial independence.
        Despite the struggles that so many Americans face, there is
    good news. Two-thirds of Americans living in retirement over
    the age of 65 over the past 5 years say that retirement is
    becoming a little more comfortable. In 2019, four out of five
    Americans aged 65 and older reported having enough money to
    live comfortably. This all means the financial well-being of
    seniors has improved substantially in recent decades and it
    gets better every single year. There is still more work to be
    done, and that is one of the reasons why we are working on what
    I would call SECURE Act 2.0, a bill designed to help us solve
    some of these problems and overcome some of the challenges.
        Thank you, Mr. Chairman.
        The Chairman. Thank you, Ranking Member Scott.
        Now we will turn to our witnesses. Before I do that, I want
    to acknowledge the presence of Senator Blumenthal, who is here
    with us. We will have Senators coming in and out today. As you
    know, Thursday morning is a busy committee morning, so we will
    have Senators coming in, sometimes coming in and having to
    leave and come back for questions. We will try to fit everybody
    in as they are available.
        I want to turn to our first witness, Mr. Tom Foley. Mr.
    Foley is the Executive Director of the National Disability
    Institute. He has more than 30 years experience in the
    disability community. He has dedicated his career to working to
    create pathways to employment and financial security for people
    with disabilities. We welcome him.
        Our second witness is Mr. Rodney Brooks, a retirement
    columnist and author. He brings decades of experience writing
    on retirement, personal finance, and business issues for
    publications ranging from U.S. News and World Report, the
    Washington Post, and the Philadelphia Inquirer. He has
    committed his career to helping people prepare for retirement
    and save for the future. We welcome Mr. Brooks.
        Third, our third witness is, as I mentioned earlier in my
    opening statement, Dr. Josie Badger from New Castle,
    Pennsylvania. That is Lawrence County on the Ohio border in
    Western Pennsylvania, north of Pittsburgh. Dr. Badger is the
    founder of J. Badger Consulting, Incorporated where she
    provides youth development and disability consulting services
    for various organizations.
        She is the campaign manager of the United Way of
    Southwestern Pennsylvania's #IWantToWork campaign, where she
    works to improve the employment of people with disabilities.
    She is also a person who knows firsthand the challenges people
    with disabilities face when trying to save for the long term.
        Due to the Federal asset limit for many years, Dr. Badger
    was unable to save more than $2,000 without risking the loss of
    her Federal benefits. That changed with the passage of the ABLE
    Act, which allowed her to finally save for her future.
        For our fourth witness, I will turn to Senator Scott, our
    Ranking Member, to introduce Mr. Iacofano.
        Senator Tim Scott. Thank you, Chairman Casey.
        It is my pleasure to introduce today John Iacofano. John is
    the owner of Iacofano's Catering in Mount Pleasant, South
    Carolina. He is an entrepreneur, a leader, and a successful
    employer. I am proud of his work and the company he has built
    in my home State.
        With only $90 to his name and money coming in from a
    painting job, John opened his first location in February, 2002.
    Today, John has 85 employees, six locations across the country
    including Charleston, Denver, Cleveland and Philadelphia.
    Iacofano's provides catering and food services to corporate
    events, weddings, in-flight service, senior living facilities,
    and meal service non-profits such as Meals on Wheels, which
    proved so critically important during the peak of COVID-19.
        John's testimony today is about his efforts and success at
    offering a brand new retirement savings plan to his employees
    because of the passage of the SECURE Act.
        I do not want to steal his thunder about what he is doing
    on this, his launch date for the retirement plan, but I look
    forward to hearing his comments.
        John, we truly appreciate your entrepreneurship and hard
    work offering new opportunities to your employees. Thank you
    for taking the time to be with us today.
        The Chairman. Thanks, Ranking Member Scott.
        Now we will turn to our witnesses for their statements. We
    will begin with Mr. Foley. Mr. Foley, you may begin.

        STATEMENT OF THOMAS FOLEY, EXECUTIVE DIRECTOR, NATIONAL
                 DISABILITY INSTITUTE, WASHINGTON, D.C.

        Mr. Foley. Good morning, Chairman Casey, Ranking Member
    Scott, and other distinguished members of the Committee. Thank
    you for the opportunity to be here today.
        My name is Thomas Foley. I am the Executive Director of the
    National Disability Institute. In addition to that, I am
    someone who is blind, who has spent time on SSI, spent time on
    SSDI but has managed, over time, to build an economic future
    for myself and my family.
        As was mentioned earlier, there are far too many barriers
    to economic advancement for people with disabilities. I still
    vividly remember as a freshman in college, learning about the
    $2,000 asset limit because I was on SSI. I thought the person
    who told me that was actually joking. I wanted what everyone
    else did. I wanted to buy a home. I wanted a financial future,
    a job that led to a career, a family. I wanted the American
    dream. I was not sure how I was going to accomplish the
    American dream if I was not allowed to save money.
        That $2,000 asset limit has not changed since I was a
    freshman in college and that was a while ago. Simply put, asset
    limits and income limits discourage savings, work and hope for
    people with disabilities.
        Many other factors complicate building an economic future.
    As was mentioned, people with disabilities have a difficult
    time finding stable full-time employment. Workforce
    participation rates in June, according to ODA the workforce
    participation rate for people with disabilities was 21 percent
    versus 67 percent for people without disabilities. It is nearly
    impossible to save for a long--term future without stable
    competitive employment.
        In addition to that, recent research has shown that people
    with disabilities face additional costs that people without
    disabilities do not face. They average $17,000 a year. These
    extra costs have to be met somehow, as well.
        I was really lucky in high school as well, as was Senator
    Scott, to take a financial education course. I learned about
    saving money, how to avoid debt, how credit cards worked, why
    it was so important to get a bank account. Recent data from the
    FDIC reports that people with disabilities are three times more
    likely to be unbanked, 16 percent versus 4.5 percent, than the
    rest of the population. It is difficult to build a financial
    future without the basic building blocks of a bank account or
    financial education and financial coaching for people with
    disabilities.
        Underlying much of this is an unspoken but palpable belief,
    sometimes by teachers, sometimes by employers, unfortunately
    sometimes by friends and family, that folks with disabilities
    cannot work and cannot build a financial future. Sometimes
    people with disabilities internalize this.
        Fortunately, removal of policy barriers can change this
    narrative. One such policy action was the ABLE Act in 2014, as
    mentioned earlier. We have seen firsthand how this has changed
    people's lives. People buy homes, they go back to school, they
    start small businesses.
        Particularly for folks with disabilities, who might have
    episodic or contractual work, we have seen that ABLE savings
    that, on average, that $8,000 per account allows people to
    navigate periods of unemployment, remain financially resilient
    through economic downturns and ultimately, improve their short-
    and long-term financial outcomes.
        Unfortunately, as currently written, the ABLE account
    leaves out lots of people from being to access this tool and
    realize these benefits. Therefore, we strongly advocate for the
    passage of the ABLE Age Adjustment Act. Passing this will allow
    people with disabilities, with disability onset up to age 46,
    to open new accounts and expand the universe of ABLE accounts.
    We believe it will increase utilization of accounts and there
    are up to 6 million people who could benefit.
        In addition to that, we believe it strengthens the ABLE
    financial perspective and will create innovation within the
    ABLE space. In addition, it will allow older Americans who have
    become disabled by chronic illness, by accident, or by military
    service to benefit from this program as well.
        Members of this Committee, I started this testimony by
    talking about my American dream. I have achieved that. I bought
    the house, I have a solid retirement account. I put two-and-a-
    half kids through college. I am not particularly special.
    People do not need to change, systems do.
        With your help, today, we can begin to change those systems
    and increase financial security and economic outcomes for
    people with disabilities.
        Thank you for the opportunity.
        The Chairman. Thank you, Mr. Foley, for your statement.
        Now we will turn to Mr. Brooks. Mr. Brooks, you may begin.

     STATEMENT OF RODNEY BROOKS, RETIREMENT COLUMNIST AND AUTHOR,
                        SILVER SPRING, MARYLAND

        Mr. Brooks. Good morning, Chairman Casey, Ranking Member
    Scott and members of the Committee.
        My name is Rodney Brooks. I am a personal finance author
    and business journalist. I have written about retirement issues
    and wealth disparities for publications like U.S. News & World
    Report, the Washington Post, USA TODAY and National Geographic.
        I want to thank you for the opportunity to appear before
    you today to discuss some of the critical retirement issues
    faced by all Americans, especially some of the issues faced by
    older African Americans. Black women, in particular, face huge
    financial challenges as they age. You have all heard we are
    having a retirement crisis. That is because we are not saving
    enough to sustain ourselves when we retire. We all realize it
    and we worry about it.
        Forty-five percent of baby boomers said outliving their
    retirement savings is one of their greatest fears. There is
    good reason for that concern. Fifteen percent of Americans have
    no retirement savings at all.
        Today, we are living longer and thus, we need for our
    retirement savings to last longer. Today, a couple aged 62, the
    surviving spouse will probably live until 92.
        In the past we have had pensions that would provide
    financial resources for the rest of our lives. Our fathers and
    their fathers knew that their money would not run out and they
    would be taken care of. That is one of the reasons people
    worked for 25 or 30 years at one company. It was not just for
    the gold watch. It was to for the pension.
        Today pensions are largely a thing of the past. In 1975,
    pensions covered 40 million Americans. Today only 13 percent of
    non-union private sector workers are covered by pensions. That
    means pensions have been replaced by what I call do it yourself
    retirement plans such as 401(k)'s. I call it do it yourself
    because it puts the pressure on the workers. The workers have
    to figure out how much to save, what to invest in, and how to
    manage those investments.
        For older Americans, particularly Black women, the
    situation is more dire. Many older Americans have endured
    decades of discrimination, and as a result they have lower
    levels of education, income, and wealth.
        Additionally, Black Americans suffer disproportionally from
    eight of the top 13 causes of death in the United States. Black
    women have the lowest levels of income and wealth, which means
    that they need to continue to work as they age. Yet health
    problems can limit their ability to continue working.
        The impact of these economic inequities has resulted in
    multiple generations of poverty, and predictions from
    Prosperity Now that the average net worth of Black Americans
    will be zero by 2053 if nothing changes.
        These economic and health issues have been exacerbated by
    the COVID-19 pandemic.
        Fifty percent of Americans do not have retirement accounts
    largely because they work at small companies or they are part-
    time and do not qualify.
        Some of the programs that may improve those numbers are
    one, auto-enrollment. When a new employee starts, the company
    automatically enrolls them in the plan. That has improved
    participation dramatically.
        Two, a number of states have started State savings plans
    and require companies to actually offer these plans to
    employees.
        Three, if companies, small companies had the option to join
    together to offer better plans it reduces the costs both the
    businesses and their employees.
        They are all complicated and interrelated issues with no
    single or simple solutions. If nothing is done, we are going to
    see more Americans, especially Americans of color, fall into
    poverty.
        I want to thank you again for the opportunity to provide
    testimony and for your interest. I will be happy to answer any
    questions the Committee may have.
        Thank you.
        The Chairman. Thank you, Mr. Brooks, for your statement.
        Dr. Badger, you may begin.

          STATEMENT OF JOSIE BADGER, Ph.D., CAMPAIGN MANAGER,
                 #IWANTOTWORK, NEW CASTLE, PENNSYLVANIA

        Dr. Badger. Thank you so much.
        Good morning. I would like to thank the Chairman, Ranking
    Member Scott for hosting this hearing and inviting me to speak.
    I would also like thank the Committee members for attending.
        This is an extremely important issue for the largest
    minority in America, or in your State, in fact.
        As you heard in my introduction, provided by Senator Casey,
    I have my doctorate and I am a business owner. I am also a
    homeowner, a partner, a daughter, a friend, and of course a dog
    mom.
        What you did not hear is that I am a person with a
    significant physical disability that I can say affects all
    areas of my life. I cannot put it into a category like I did
    with the other topics those are just elements of my identity.
    Having a disability affects my entire life and all parts of my
    being. It is the reason why I do not walk or breathe on my own,
    my need for 24-hour care, my relationships, my work, and even
    how I earn and save money.
        It does not affect the way I work, earn, or save money in
    the way that you might think it would. I work over 40 hours a
    week. I can do all elements of my jobs without accommodations
    from my employers. My disability forces me to stay poor and not
    save for those big steps that were mentioned earlier, the
    American dream, or retirement in general.
        When I was growing up, I dreamed of being a marine
    biologist. Long story short, I am on a ventilator. I do not
    swim. A change of plans ensued. I became a business owner.
        However, no one ever told me, quote/unquote, that's a great
    idea for you to be a marine biologist or a professor but you
    are not allowed to make that much money. No one told me to not
    work so hard in school, not to be valedictorian or not to get
    my degrees and pursue my dreams. That is exactly what the
    system is set up to do, to be prepared for success but not be
    able to actually achieve it, at least financially and
    stability-wise.
        As I was graduating with my doctorate, I was thinking, now
    what? I had spent years completing higher education,
    volunteering, and working part-time. Most of my peers were
    applying for fantastic jobs and comparing their offers about
    the best locations, opportunities, salary, and benefits while I
    was trying to figure out how to not be too successful.
        The reason I cannot be too successful is that I rely on
    government insurance programs such as Medicare and Medicaid for
    my survival. No private insurance will pay for the long-term
    supports and community-based services that I require to just
    get out of bed every day and to work in the first place. These
    amazing programs, however, have fairly strict income and asset
    limits. To be able to survive by having those services, I have
    to keep myself poor.
        To do so, I started a business so that I could salary but
    take job opportunities that I felt called to. Such a structure
    has allowed me to work while still receiving the medical care
    that could only otherwise be received through nursing home. If
    I did not get Medicare and Medicaid, I would be in a nursing
    home. This was only possible because I underpaid myself and did
    not have savings accounts or retirement.
        I can honestly say that it is more work to be able to work
    than the work itself.
        Some of the barriers to working and economic stability did
    change with the ABLE Account. That was the first opportunity I
    had to save more than $2,000 due to asset limits. In the past,
    I kept my income under those limits because I could not risk
    losing those life sustaining services.
        However, I opened an ABLE account because it seemed like a
    good thing to do and all the cool kids were doing it. I did it,
    too. At that point, I had no idea how useful it could be in my
    future.
        Then, during the pandemic, while I was in a small house
    renting with my partner and our two dogs and two cats, I
    realized how important having a space that I loved that was
    bigger really mattered, as I am sure maybe some of you
    realized, as well.
        I decided that it was time to buy a home. I knew that I
    could easily pay the monthly mortgage payments, but I did not
    have even close to what I needed set aside for a down payment.
    That is where ABLE came into play for me. It made home
    ownership possible.
        Through the little bit of savings that I had put into
    accounts and a gift, I was able to purchase my home a year ago
    today actually--yesterday. According to Facebook, yesterday.
        This was only possible because of the ABLE savings
    accounts. It is a wonderful program, but as it has been
    mentioned, the strict age criteria with it being that you have
    to acquire your disability before the age of 26, really limits
    the number of people that can receive this type of account. We
    need to fix that problem. We need to address an even bigger
    issue: the limitations on earning money. The Substantial
    Gainful Activity Limit, SGA for short, restricts how much money
    a person receiving Social Security Disability Insurance can
    earn a month. There are similar limits for SSI, Medicare and
    Medicaid.
        For SSDI, the limit is currently $1,310 per person. That is
    $1,500 less than the Federal poverty limit for a one-person
    household. Earning more than SGA means the possibility of
    losing life-sustaining medical and health care coverage in
    addition to the case benefits.
        Because of such policies people with disabilities,
    including me, we are capping our employments and earnings and
    ultimately our opportunities. It limits our success in order to
    just make sure that we are receiving life preserving and
    sustaining care.
        At one point in time, the asset and income limits probably
    made a lot of sense. No taxpayer wants to be giving money to
    people who do not need it. However, with medical advancements,
    assistive technology, workplace accommodations, and actually
    changes in the work world and fields, these restrictions are
    actually restricting individuals from pursuing opportunities.
        People like myself, who receive and require a high level of
    support and medical care, would not have survived previously
    without these advancements let alone be able to work in
    previous decades. Now not only are we surviving, but we are
    capable of thriving.
        Thank you so much.
        The Chairman. Doctor, thanks very much. I just want to make
    sure we can move through our witnesses.
        The fourth and final witness is John Iacofano, and he will
    provide his testimony and then we will get to questions.

     STATEMENT OF JOHN IACOFANO, OWNER, IACOFANO'S CATERING, MOUNT
                        PLEASANT, SOUTH CAROLINA

        Mr. Iacofano. Thank you. Good morning, Chairman Casey,
    Ranking Member Scott, and members of the Committee.
        My name is John Iacofano and I am the owner of Iacofano's
    Catering in Mount Pleasant, South Carolina.
        Twenty years ago, as a struggling student with $90 to my
    name, I painted a building to get the down payment for a 300
    square foot space to start my catering business. Iacofano's
    began by preparing deli trays for corporate groups and later
    opened three restaurants.
        Today, Iacofano's provides catering and food services to
    corporate events, weddings, in-flight catering, senior living
    facilities, and meal service for non-profits such as Meals on
    Wheels. We have 85 employees and six locations across the
    country, including Charleston and Columbia, South Carolina;
    Charlotte, North Carolina; West Deptford, New Jersey, a suburb
    of suburban Philadelphia; Cleveland, Ohio; and Denver,
    Colorado. Our average employee age is 45, with the oldest being
    78.
        During the pandemic we were able to maintain a workforce
    and add additional quality employees from large corporate
    layoffs. As large corporations began to rehire, we were unable
    to keep up with the benefits they offered, specifically
    retirement plans. We lost one of our best employees when her
    former employer, an international catering company, offered to
    reinState her benefits. We offered her over 11 percent more pay
    plus success sharing checks but she went back with her former
    employer for one simple reason, the bigger firm offered her a
    retirement plan.
        My small business attempted many times to implement our own
    employee retirement plan but were shut down by the excessive
    fees along with plan liabilities and administrative burdens my
    team could not handle.
        At Iacofano's we are on a mission to cover the entire
    circle of life for our employees: from health care, competitive
    pay, vacation, and more. However, the number one inquiry
    candidates and employees ask is, ``do you have a retirement
    plan?''
        Just a few months ago, Matt Watson at NFP approached me
    with a possible solution to our retirement plan struggles. The
    SECURE Act had passed through Congress and established Pooled
    Employer Plans (PEPs), allowing unrelated employers to join
    together to provide workplace retirement savings options
    without some of the costs, administrative burdens, and
    liability attached to sponsoring a plan on their own. One month
    later we are on a conference call setting up our plan and 2
    months later we are launching our first employee retirement
    plan at Iacofano's.
        The new PEP system is a plug-n-play plan that links
    directly to our payroll system at a low cost of $2,600 per year
    broken into quarterly payments. Our plan provider offers
    educational classes to our team; and handles all employee
    enrollment, legal requirements, and administrative work. These
    cost and administrative savings are the sole reason we are now
    able to offer our employees retirement benefits. Plus, these
    low costs allow us to offer a very competitive match. These are
    new dollars going into the paychecks of our valuable team
    members.
        Chairman Casey, Ranking Member Scott, and members of the
    Committee, I am thrilled to announce that as of today our
    employee retirement plan is open for enrollment. For the
    majority of my employees this is the first workplace retirement
    plan ever.
        On a personal note, my father was a small business owner.
    He passed away and the business was closed. My mother, as a
    stay-at-home mother for 30 years, had to reintroduce herself
    into the workforce. Now, at 78 years of age, her current
    retirement plan includes $1,450 from Social Security and only
    $270 from a large company that she had worked for over 10
    years. Had access and education of the PEP plan been available
    to my family, my mother would not have to be working full time
    to make ends meet in retirement.
        The PEP is going to help my employees engage in the
    retirement that they once thought they were destined to have.
        Our next goal is to continue to grow the diversity of
    employees within our company. We are fortunate to work with
    Babcock Centers in Columbia, South Carolina, an Adult with
    Disabilities Empowerment Organization. Babcock approached us
    over 2 years ago asking if we were willing to bring on one or
    two of their clients to work in our facility. With the help of
    a Babcock representative, we hired a gentleman named Jay. Jay
    continues to work for us and is a vital part of our team. If it
    had not been for our services providing meals to the Babcock
    Center, we would have never known about the opportunities to
    hire adults with disabilities.
        Small businesses need more information and availability to
    hire, train, and provide these new opportunities for adults
    with disabilities. This, along with the new PEP plan, will only
    help small businesses like mine become competitive employers
    and take care of the entire circle of life of their employees.
        I would be happy to help this Committee in any way possible
    to get the word out to small businesses.
        Thank you for your time and I am happy to answer any
    questions you that may have.
        Thank you.
        The Chairman. Thank you for your testimony.
        I want to make sure that I am correct about something. I
    have pronounced your name more than once now and I want to make
    sure I am pronouncing it correctly. I put the emphasis on
    ``ick-ofano'' and I thought I heard you say--I want to make
    sure I am right--more like ``I-cofano''.
        Mr. Iacofano. Yes, so it would be like ``ya-cofano''
    really, but we have been--it is ``I-cofano''. We say ``I--
    cofano.''
        The Chairman. Okay, I will try to
        Mr. Iacofano. Iacofano. That is okay. You are not the first
    person to butcher our last name. You will not be the last, I am
    sure.
        Senator Tim Scott. I was wondering the same thing about
    ``ick'' or ``ike''. He just entered another element though, so
    we are going to be here for a long time.
        The Chairman. Well, we are grateful
        Mr. Iacofano. I am not going to say ``ick'', ``ick'' in
    catering would not be a good introduction.
        Senator Tim Scott. Yes, icky. We will go with ``ike''.
        The Chairman. I think we have to give you extra time
    because of that question I just asked you, but thanks so much.
        We will turn to our questions. I wanted to start with Dr.
    Badger. Doctor, I wanted to thank you for sharing your story,
    which is both a story about the challenges you have faced, but
    also a story of real inspiration, what you have had to
    overcome, to open a business and to buy a home and to do so
    many other things that you have related today.
        In your testimony, you talked about how ABLE was your first
    opportunity to save more than $2,000 due to asset limits for
    Medicaid. You also said you had not really put much thought
    into long-term savings since you had never had the opportunity
    to save before. As you put it, the way the system is set up,
    you said it was set up ``to be prepared to be successful but
    not to actually be permitted to achieve success, at least
    financial success and stability.''
        That is a powerful statement and, I think, emblematic of
    what we are wrestling with here.
        You said that it was the COVID-19 pandemic that motivated
    you to start saving with a goal in mind. Were is my question:
    how did an ABLE account, in your case, help you to level the
    playing field for people with disabilities in your case, but
    more broadly for people with disabilities who can access them?
        Dr. Badger. Thank you so much for the question. Yes, I
    believe that ABLE is one of the fundamental areas that will
    allow people to be more successful. For me, it was home
    ownership and I hopefully will continue to use it to pay off
    that monthly mortgage of mine.
        I think for other individuals there has been a long-
    standing concern and teaching from the system that you, as a
    person with a disability, cannot have money. I know a lot of
    individuals who are my age and younger who are putting money
    under their mattresses or only working in cash which, when I
    was redoing our house, we found money in our ceiling. We are
    reverting back into acts that were done during the Great
    Depression of saving money when possible. The bigger issue is
    not having money to save in the first place. I think that is
    the next step beyond allowing more people to earn, save, and
    know that they are not going to lose life sustaining care to do
    so.
        The Chairman. That is very helpful, to have you walk
    through your own personal experience.
        Speaking with people with personal experiences, I want to
    turn to Mr. Foley. We heard, as I just mentioned from Dr.
    Badger, that her ABLE account, what it means to her and so many
    in the disability community. One of the real limitations, one
    of the problems we are trying to solve with the legislation, is
    the 26-year-old limitation. Meaning that the accounts are only
    open to people who have had a disability before their 26th
    birthday.
        Can you explain why the original ABLE act included the age
    limit, which we now want to change, and why it is important to
    expand ABLE accounts?
        Mr. Foley. Thank you, Senator.
        Yes, so the changing it to disability onset before age 26
    was kind of a last minute accommodation made back in 2014 from
    a scoring perspective for the bill. The entire time folks were
    advocating for it and talking about it, a much larger group of
    people had been envisioned. It was mostly for scoring purposes.
        To the second part of your question, you know, we estimate
    that there are as many as 6 million people who would be newly
    eligible if the ABLE Age Adjustment Act happened. Those are
    people whose--obviously, their disability happened after age
    26. Maybe that was an accident. Maybe that was an illness
    picked up later in life or someone from military service.
        Having worked in this space for quite a while, it is really
    difficult to meet a 27-year-old who is recently spinal cord
    injured and tell them there is this great product out there but
    it is not for you. Or someone coming back from a tour of duty
    who has been injured fighting for this country and telling him
    or her that ABLE is not for them.
        There are 1 million veterans that could be eligible for
    ABLE and it is imperative that ABLE be extended to be able to
    be a benefit from a financial standpoint, from a support
    standpoint, and from a long-term economic development
    standpoint for those individuals.
        The Chairman. Mr. Foley, thanks very much. I will turn to
    Ranking Member Scott for his questions.
        Senator Tim Scott. Thank you, Mr. Chairman. I understand
    that Senator Lee is available now for questions, and I am happy
    to defer to Senator Lee if he is still available for questions
    now and I will take the second round.
        The Chairman. Senator Lee.
        Senator Tim Scott. Sounds good.
        Mr. Iacofano, a quick question for you. I know that the
    SECURE Act provided you with an opportunity to start your
    retirement account today and congratulations. As a former small
    business owner myself, I understand and appreciate the
    excitement that when you are able to offer new benefits for
    that extended family, as I discussed in my opening comments, it
    really is heartwarming for you and certainly good for your
    employees.
        I know that there are several parts or aspects of the
    SECURE Act that can be helpful, whether it is reducing the
    price or helping to cover the liability exposure. Which of the
    two, or other aspects of the SECURE Act, help you start your
    retirement account today?
        Mr. Iacofano. There is multiple aspects. One major one is
    obviously $2,600 a year is the cost to me, broken apart in
    quarterly payments which is huge.
        Then you have the administrative, the fiduciary, the entire
    liability basically is being handled by the plan itself where
    with the old plan, before you guys put this new SECURE Act
    through, the old plan had the ``one bad apple'' part of it.
        Everybody could be liable in the plan. This got rid of
    that, which is excellent. The new plan helped to do that.
        The two, the liability and the very low cost of $2,600.
        Senator Tim Scott. During your opening comments, you made a
    statement that caught my attention and I want to ask you a
    question and give you a little more time to expound on the
    importance of the competitive advantage that comes with the
    ability to offer retirement programs to your employees. You
    talked about losing a key employee, or at least an important
    employee, because they were able to have a retirement system.
    They turned down an 11 percent wage increase in order to have
    an opportunity to secure resources in retirement.
        How important is having something like the SECURE Act in
    place and you launching your own retirement plan in retaining
    your best and brightest employees?
        Mr. Iacofano. It is--I will not be competitive if I do not
    offer retirement. This allows me to not only offer retirement,
    become competitive, be able to obtain new team members. Due to
    the low cost, it also allows me to match. We will be matching
    100 percent on the first 3 percent and 50 percent on 4 and 5
    percent, which makes me extremely competitive against very
    large corporations and puts us on the same level.
        Senator Tim Scott. Mr. Iacofano, I would say that you are
    doing better than most corporations. One hundred percent on the
    first 3 percent is pretty remarkable. That is fantastic.
        Mr. Iacofano. Thank you.
        Senator Tim Scott. It tells me that you care about your
    employees.
        Mr. Iacofano. Well, it is the low cost. It is the low cost.
        Senator Tim Scott. That is fantastic. It allows you to
    transfer those resources or the benefits to your employees
    through the additional matching opportunities. That is good,
    that is being a good employer and something that we should all
    celebrate.
        You also do something else that I think is really important
    to the workplace and very important to maximizing human
    flourishing. You look for ways to hire folks who are very
    talented, who might have varying skill sets, different talents,
    but also different challenges to coming to the workforce. I
    know that you have done a good job of offering opportunities to
    folks with disabilities.
        How can we encourage more companies to follow your path in
    recruiting and retaining vital workforce talent to include
    those folks with special needs or disabilities?
        Mr. Iacofano. Well, I was fortunate enough to work with
    Babcock Center or else I would not have even known that there
    was such a thing as employing adults with disabilities, nor
    would I even know the need for it.
        We have very talented workers out there that need jobs. I
    believe in South Carolina alone and in Pennsylvania the
    unemployment rate for adults with disabilities, in Pennsylvania
    I believe it is 61 percent and South Carolina is about 67
    percent. Transportation is a huge need. Jay, who is an adult
    with disability and been with us for over two years, we pick
    him up and drop him off to--pick him up from home and drop him
    off at home every day. Transportation is huge.
        How can we create the space or what needs do the adults
    with disabilities have in the workforce? Whether it is special
    equipment, whether it is the ride to work. What do they need to
    get to work and be able to be successful at work is the
    question. I believe that is where our resources can go.
        Senator Tim Scott. Thank you, Mr. Iacofano.
        With my last 30 or 40 seconds, Mr. Brooks, I would like to
    ask you a question about retirement portability. Said simply,
    when you have a small retirement account, $5,000 or $6,000 and
    you change jobs, oftentimes what happens is what we call
    leakage. You just take that money that is in your retirement
    account and you cash it out. You pay a penalty. You have to
    claim it as ordinary income. Those retirement dollars are gone.
        I worked with the DOL and a guy named Bob Johnson to help
    create the framework for auto portability between retirement
    plans. How important is this reform for those living in the
    underserved communities? How can we continue this progress?
        Mr. Brooks. Yes, I think portability is critical. As you
    said, people cash out their plans, especially if they have a
    small amount. Part of it is the company's do not encourage you
    to merge them.
        I think what might help that is some financial education
    because most of the people who--many of the people who cash out
    are low-income or young. I do not think they realize the tax
    implications when they do cash out until they have to file
    their tax returns.
        Senator Tim Scott. Then it is a big surprise.
        Mr. Brooks. Yes, a big surprise.
        Senator Tim Scott. Thank you, Mr. Brooks. Thank you, Mr.
    Chairman.
        The Chairman. Thank you, Ranking Member Scott.
        We will turn next to Senator Kelly.
        Senator Kelly. Thank you, Mr. Chairman.
        I want to followup on a couple of Senator Scott's
    questions. This question is for Dr. Badger.
        Dr. Badger, Employment First is a framework that seeks to
    make integrated employment the goal and priority for states and
    public systems. In 2017, Governor Ducey, the Governor of
    Arizona, signed an executive order declaring Arizona an
    Employment First State, which required state agencies to
    partner with outside vendors to improve job opportunities for
    people with a disability. Stakeholders across the State worked
    collaboratively to make this happen.
        Arizona is one of many states working on this, and it is a
    priority for the Federal Department of Labor. Could you
    describe some successes that you have seen that more states
    should try to emulate?
        Dr. Badger. Absolutely. Thank you so much for that
    question.
        I was part of--through the #IWantToWork campaign we worked
    to establish our Employment First legislation. I think what we
    are seeing, and it is really trend based, is that states that
    have had Employment First specifically legislation and
    executive directives, they are having progressively more
    individuals with disabilities who are employed. I think that if
    you start looking at the numbers, and there was a recent report
    put out by ACL, 30 Years of Living, you will see that the
    states that have had those pieces of legislation on the books
    longest have the highest employment rates. I think we need to
    look at the data to show the success.
        Senator Kelly. Beyond the legislation that is already on
    the books, what are the top one or two ideas to continue to
    increase the employment rate for adults with disabilities?
        Dr. Badger. I think going forward we are looking at making
    sure that that mindset of Employment First, making sure that
    competitive integrative employment is the mindset that we hope
    for all individuals, starting with IEPs in high school, is key,
    and endorsing that as a State. Also, really working on the
    collaborative efforts that you mentioned to make sure that our
    policies and actions in the country, State and locally truly
    support that employment work of people with disabilities.
        Senator Kelly. Thank you, Dr. Badger.
        Dr. Badger. Thank you.
        Senator Kelly. Mr. Foley. Mr. Foley, your testimony
    mentioned the increased likelihood that individuals with
    disabilities would be underbanked. We know that asset and
    income limits make saving complicated. I am also curious about
    access to credit.
        Could you describe what the challenges are for gaining
    access to credit and building credit over a lifetime for adults
    with disabilities?
        Mr. Foley. Absolutely, thank you for the question.
        We have done research that indicates that folks with
    disabilities are two to three times less likely to have access
    to the credit they need than the general population. This goes
    along, I think generally, with the information about being
    underbanked.
        Basically, people with disabilities would benefit greatly
    from financial education, financial counseling, credit
    education, and credit counseling. Many of the financial
    education curriculums out there and credit bureaus are more and
    more doing a lot of work to try to reach low--and moderate-
    income communities and we work closely with several of them to
    make sure that people with disabilities are included in that
    work.
        Many people with disabilities are also what is known as
    credit invisible. You know, if you do not have a bank account
    and you are not working, there are not a lot of accounts or
    credit bureaus to pull from. I know the industry is working on
    new models to help alleviate these issues. It is definitely a
    concern with regard to credit access to folks with
    disabilities.
        Senator Kelly. Mr. Foley, do the credit agencies use any
    different standards for individuals with disabilities?
        Mr. Foley. You know, I would certainly, you know, from an
    income standpoint, SSI and SSDI qualifies as income. I do know
    that from a scorer's perspective, medical debt has begun to be
    treated differently in recent years with regard to its impact
    on credit scores.
        I guess the short answer to that is yes, to some extent,
    but there is still more work to be done.
        Senator Kelly. All right, thank you, Mr. Foley. Thank you,
    Dr. Badger.
        The Chairman. Senator Kelly, thanks very much. Now we will
    turn to Senator Lee, who is joining us virtually.
        Senator Lee. Thank you, Mr. Chairman.
        Savings and investments enable us to serve our respective
    communities and increase our future capacity to afford
    necessities. Financial capital, in fact, underpins social
    capital. Savings allow us to form and expand families and to
    surround ourselves with neighbors and institutions that enrich
    our lives.
        Savings make retirement possible, which provides us with
    the opportunity to invest ourselves and our time more deeply in
    our communities.
        Mr. Iacofano, what are some of the ways in which empowering
    your employees with the opportunity to save for retirement
    might have a trickle-down effect that benefits other members of
    the community in the Mount Pleasant area? For example, do you
    think that making retirement savings possible for your
    employees allows them to invest their time and their resources
    more fully in their communities?
        Mr. Iacofano. Well, you are talking about having to have
    people unprepared for retirement and having to work, going to
    work all the way until your 70's and your 80's because Social
    Security is not going to give you the full retirement that you
    need. Therefore, in the community, are you able to be part of
    your community more? Are you able to donate time to your
    community? Or are you going to be working 50, 60 hours a week
    when you are 70, 80 years old?
        Really, right? As you age, you start to donate more time
    and resources and knowledge to your community. Are we going to
    have the ability for our aging population to do that, is the
    question? I would say no.
        Senator Lee. Thank you.
        In 2019, Congress passed legislation that created Pooled
    Employer Plans to provide businesses with more flexibility in
    how they can band together with other businesses to offer
    retirement plans to their employees. I have heard from Utah
    companies and Utahans seeking to save for retirement, that this
    has been a great benefit for them.
        Mr. Iacofano, you mentioned in your testimony that the
    ability to provide these Pooled Employer Plans, or PEPs, to
    your employees will change the retirement that they once
    thought they were entitled to have. How have these plans
    benefited your employees? Are there any additional barriers
    that you face as you seek to create opportunities for your
    employees to achieve their retirement and the kind of
    retirement they desire?
        Mr. Iacofano. The biggest barrier is knowledge and
    understanding of how important it is, right? When you are 20,
    30, maybe in your 40's, you are not even thinking about
    retirement. You are not thinking, that is way off in the
    future. By starting this plan, it forces my company to educate
    all levels, all age levels of employee within the company and
    it begins to focus on the retirement. With the match, with the
    PEP and the SECURE Act being put in, it allows me, due to its
    being so low cost, allows me to match.
        What that is going to do is really, as any employee, you
    should be donating 5 percent of your wages because we are going
    to be matching 4 percent. Now you are putting 9 percent away
    toward retirement. Whether you do that 401(k) or Roth is up to
    you. Nine percent will be put away and you are donating 5 and
    we are giving you 4. This is allowing us to educate what
    typically somebody would not be paying attention to.
        Senator Lee. Thank you, that is helpful.
        Mr. Brooks, you mentioned in your testimony that under the
    majority of today's retirement plans the responsibility falls
    on the individuals to figure out how much to save, in what to
    invest, and how to manage their investments. What is your
    assessment, Mr. Brooks, of the financial literacy of Americans
    when it comes to retirement savings? Is there better financial
    literacy for some types of retirement savings accounts than for
    others?
        Mr. Brooks. Well, financial literacy as a whole, there are
    more courses offered--actually mandatory courses--at the high
    school level where I think they have to start. Not that many.
    When it comes to financial literacy as a whole, I think we are
    pretty weak.
        Now there are companies who, along with their plans, offer
    some sort of support. My experience has been that many do not.
        When I say employees are left to themselves, they can call
    possibly an 800 number but at one time human resources
    companies--I am sorry, human resources departments offered that
    kind of assistance. Now companies have cut back so that is not
    available anymore.
        Senator Lee. Thank you.
        Thank you, Mr. Chairman. I see my time has expired.
        The Chairman. Senator Lee, thanks very much.
        I want to acknowledge some Senators who joined our hearing,
    Senator Rick Scott, as well as Senator Warnock. I know we are
    awaiting some other Senators to arrive. In the interim, I will
    start with another question. If other Senators arrive, I will
    cut myself off.
        I wanted to turn to Mr. Rodney Brooks. Mr. Brooks, you
    examined the real world impact of retirement policy on people
    working hard to save for their future. Many proposals that have
    been discussed today have looked at ways to improve retirement
    accounts for people who already have access. We have also heard
    form people who face steep barriers to long-term and stable
    employment or career advancement, which would provide them
    access to retirement accounts. Unfortunately, we know that
    communities of color and people with disabilities are more
    severely impacted by these issues.
        I am ask you kind of a question that you made reference to
    in your opening but I wanted to reiterate some of it. What
    steps need to be taken to increase long-term savings for those
    who have traditionally struggled to access stable retirement
    accounts, such as those holding multiple jobs or facing
    difficulty holding a job long-term?
        Mr. Brooks. One option, I think, is the State savings plans
    that are being offered. I think a dozen states are offering it.
    Again, those are offered through, mostly through employers.
        One option might be a baby bonds type program that has been
    proposed by economist William Darity and in legislation
    proposed by Senator Booker that would basically provide say
    $1,000 to a baby born anywhere. The amount depends on the
    income of the parents. By the time they are 18, they will have
    some income to invest for either college education or to buy a
    house.
        Morningstar basically said a baby bond program would cut
    the racial wealth gap in half.
        The Chairman. Thank you very much. I appreciate you
    bringing your experience to bear in providing suggestions for
    steps we can take.
        I want to turn next to Dr. Badger and Mr. Foley, maybe a
    kind of a joint answer or a question for both, depending on who
    wants to take it first. You have both worked over the years to
    improve economic access for people with disabilities and you
    both have personal experience with some of these challenges we
    have talked about.
        Mr. Foley, your work at the national level and, Dr. Badger,
    your work in Pennsylvania have given you important perspectives
    in this work not only professionally but personally.
        Mr. Foley, in your testimony, you put it simply. You said
    ``Asset and income limits discourage savings, work, and hope.''
    You have both discussed, both Dr. Badger and Mr. Foley have
    both discussed the asset limit for Federal benefits and how
    ABLE accounts have helped to address part of that issue or part
    of that problem but other challenges remain.
        Maybe we will start with Dr. Badger because I know you made
    reference to some of these issues when I was calling the time
    or cutting you off for time. What are the one or two other
    actions that you think we need to take to make it possible for
    more people with disabilities to obtain jobs and be able to
    plan for their economic future? I will go with Dr. Badger, I
    will give Pennsylvania priority here, and then Mr. Foley.
        Dr. Badger. Thank you, Senator.
        I think that we need to look at other options allowing
    people to earn more. I think some of that is expanding the
    Medicaid buy-in for workers with disabilities. In Pennsylvania
    it is called MAWD, Medical Assistance for Workers with
    Disabilities.
        The other part is we need to start looking at these issues
    such as retirements. At this point, those of us who require
    medical assistance, Medicaid or Medicare, or cash benefits
    cannot have liquid savings accounts. We cannot have retirement
    that can be liquidated. We need to start looking at different
    savings plans that can be permissible that would allow us to
    retire.
        ABLE is wonderful and they are still saying it will take
    about $1 million to retire comfortable, and that is not even
    close to what we can save.
        Thank you.
        The Chairman. Thanks very much. Mr. Foley.
        Mr. Foley. Thank you, Senator.
        Yes, Medicaid buy-in programs and, you know, I would like
    to put out the idea of a national Medicaid buy-in program that
    met certain criteria that was portable would certainly go a
    long way to helping people with disabilities seize new
    opportunities outside of a State that they might be currently
    working in.
        I still think ABLE Age Adjustment Act is a huge piece of
    what we have seen drives savings, drives work, drives small
    business development.
        I will circle back to that original quote. We are telling
    18-year-old kids with disabilities not to save, not to work.
    Even if you do, you will not be able to save your money. We
    have got to do something about that $2,000 asset limit because
    those are the formative years. You know, that first job, that
    second job where you learn a work ethic, you learn that you can
    save money to buy baseball tickets or go out to eat or whatever
    are just really, really important for building long-term stable
    employment.
        Without those experiences, without those learnings, you
    know, a lot of people with disabilities will not be able to
    build that career, build that retirement account and purchase a
    house. I think we definitely have to do something about that
    $2,000 asset limit, as well.
        The Chairman. Thanks very much.
        I will turn next to Senator Braun and then, after that,
    Ranking Member Scott if you want to start another round.
        Senator Braun, who I think is joining us virtually.
        Senator Braun. Yes, thank you, Chairman Casey.
        My question here in a moment is going to be related to not
    building wealth in the sense of retirement plans and so forth.
    It is going to be preserving wealth. Being a business owner, I
    found it easier to put together--especially when you get to a
    certain size--good retirement plans. The real wrestling match
    and the depleter of wealth in many cases is the wrestling match
    you have with the health care system.
        My question is for Mr. Iacofano, in the sense that I know
    he used the concept of pooling, allowing smaller businesses and
    entities to pool together to get some of the benefits that you
    get in any case where you align forces, you kind of increase
    your bargaining power.
        I am concerned that whatever you do there, as you are
    running a company, you still have the biggest challenge for
    your company and your employees, and it is our broken health
    care system. Thirteen years ago I took it on when I had 300
    employees, just large enough to where you did not need to pool
    to get the benefits that were largely not there for companies
    my size.
        I am interested in seeing what your issues have been with
    health care because I think it is very analogous and I think it
    is the biggest depleter of wealth because of the costs and the
    fact that, in my case, I was able to freeze health care costs,
    make my employees engaged consumer focusing on avoiding the
    system, paying for 100 percent of wellness, but getting them to
    be in unison with me to take on a challenge that now has--
    unlike many other companies--become something that is not as
    dominating as it used to be.
        Mr. Iacofano, I would be interested to hear your challenges
    with health care. Do you think pooling and associating by being
    able to team up with other companies your size would be a
    beneficial tool? The health care industry makes it tough to do.
    Let me know your thoughts on health care as being analogous to
    what you did with retirement.
        Mr. Iacofano. Thank you, Senator Braun. This is--I do not
    know that we have enough time for this discussion. Every year
    it is a challenge for me to just keep my health care. I do not
    have enough participation, yet we pay approximately over 76
    percent of the health care costs for our team members. Every
    year I have to increase the cost, the deductibles, and
    everything just to--and the cost of the health care goes up.
    The deductibles go up, the health care goes up. I try to take
    on more of the burden. I cannot get the--the importance of
    health care, the education of the importance of health care is
    very difficult as well for employees to understand especially
    depending on the age, whether somebody needs health care.
        To do a pooled employer plan would be unbelievable. A a
    matter of fact, I am from Cleveland originally. When my father
    was a small business owner, Cleveland had something like that.
    We only had three or four employees but we benefited at the
    time. I cannot remember the name of it but I know we benefited
    at the time from that pooled employer health care plan that was
    provided. It was some type of business group that was together.
        That would be unbelievable. Every year, I a sweating
    whether or not we are going to be able to even provide
    insurance for our team.
        Senator Braun. For you and anyone else listening out there
    today, I have dropped a bill called the Fair Care Act, which is
    the most comprehensive approach to what you could do here in
    the Federal Government to make it consumer driven, embrace
    transparency, embrace competition. The industry runs like an
    unregulated utility in that they disguise themselves as being
    free enterprise with none of the characteristics.
        I think that we need to pay attention to that because
    regardless of what you do on retirement and keeping your bottom
    line healthy, it is like a tapeworm on your business--and I
    think Warren Buffet coined that term.
        I would be happy to reengage with you where we have more
    time. Anyone else listening out there, get a hold of my office
    if you want to see what we can do for the Federal Government.
    Sadly, the clout of pharma, of hospitals, providers and
    insurance is so heavy that most Democrats who bring health care
    as the most important issue there run into issues where they
    are not willing to reform the industry before they want more
    government involved with it.
        I think you need to do the reform first before you tackle
    how government gets more involved with it. For you and any
    other small businesses out there, reach out to our office. I
    will share with you what I did in my own company to keep health
    care costs flat and to where my employees are healthier and
    spend less on health care now than they did 13 years ago.
        I think my time is up and that is a lot to digest. Thanks
    for taking the question. Let's reengage down the road.
        The Chairman. Thanks, Senator Braun.
        I will turn to our ranking member, Senator Scott.
        Senator Tim Scott. Thank you, Mr. Chairman.
        I would like to talk to Mr. Brooks about the importance of
    financial literacy for some portion of my time. It is important
    for us to recognize that financial literacy is critically
    important. We should start the conversation not when we are in
    our 50's or early 60's, but in our 20's. Frankly, even in high
    school it would be importance for us to have that engagement.
    As we know the magic of compounding interest takes time. If we
    have time it is miraculous, comparatively speaking, than
    starting your conversation about retirement in your 40's.
        Mr. Brooks, would you like to weigh in on the importance of
    starting early in the financial education and then starting
    early with investing in your own retirement?
        Mr. Brooks. Sure.
        As I mentioned before, a good first step would be some sort
    of requirement of financial literacy courses in high school.
    There has been some good success for some programs that have
    actually started before high school.
        One of the advantages of a program with financial education
    for people in elementary school, for instance--and there are
    some like Ariel Academy in Chicago--is that in addition to
    teaching the kids, they teach the parents, as well.
        I think the biggest help would be requiring, basically
    making a financial literacy course a requirement in high
    schools, and maybe even junior high schools.
        Now as people get older, it is harder but it is still
    important. I think using people going into community centers,
    senior centers, I think all of that is useful.
        Now we are actually seeing professional athletes basically
    take on the cause.
        I think that can make a big impact with young people.
        Senator Tim Scott. Thank you, Mr. Brooks.
        I know that a few years ago, Chairman, I started something
    called Financial Football where we partnered with the NFL and
    Visa to bring a Madden-type game of football to high schools
    throughout the country. Specifically, we started at home in
    South Carolina at my alma mater Stall High School. We literally
    had teams playing against each other, students joining teams.
    We brought in a couple of Carolina Panthers to coach the team
    so that we could have a conversation and a debate around issues
    of savings and retirement and investments like mutual funds
    versus individual stocks and derivatives.
        The more complicated the question the more yards you gained
    or the pass was like a hail Mary. That turned out to be a lot
    of fun. If we could find a way to make financial literacy a
    little more engaging, financial education a little more
    interesting for some of the young folks in 8th and 9th grade,
    we might find ourselves having a better future for those young
    folks when they are entering into the retirement years.
        I will close with this comment. When I was selling
    financial plans and some retirement plans, I would say to the
    folks I was talking to that a 19-year-old that saves $100 a
    month at 12 percent interest will likely have more money than
    the 45-year-old that saves $1,000 a month at the same interest
    when they hit age 65.
        The Chairman. That is remarkable.
        Well, Ranking Member Scott, thank you for those questions.
    We are approaching the end of our time so I wanted to provide a
    closing statement and then I will turn to Ranking Member Scott.
        As we heard today, millions of Americans face barriers to
    achieving economic independence and a secure retirement. People
    with disabilities and communities of color face unique and
    overlapping challenges. Federal asset limits make it easier for
    people with disabilities to keep their incomes low than to
    build long-term savings accounts or build a long-term saving
    account. Workplace biases keep both people with disabilities
    and communities of color in lower paying and sometimes in
    multiple low-paying jobs.
        These challenges are building up over lifetimes and across
    generations, making the dream of retirement almost impossible
    to achieve for so many.
        We must find ways to eliminate the employment gap and the
    wage gap faced by people with disabilities and folks in
    communities of color. Passing legislation like the ABLE Age
    Adjustment Act, Senate Bill 331, will provide millions of
    Americans with disabilities, including over 1 million veterans,
    a pathway to savings.
        I look forward to working with all of my colleagues to
    advance this critical legislation and other policies that we
    have heard about today to address these issues. I want to
    thank, in particular, Ranking Member Scott for his own
    perspective on this and his ideas and for bringing his own
    personal experience to bear on these issues.
        Ranking Member Scott, I turn to you.
        Senator Rick Scott. Thank you, Mr. Chairman. Thank you once
    again for holding a very important hearing that so many
    Americans, especially folks in their golden years and people
    with disabilities, will learn important information as they
    watch this over and over again, I am sure. This is an important
    hearing about an important topic that will have an impact
    positively or negatively on retirement years for so many folks.
        It is my heart that we can do better. We can do better in
    educating and informing the public about the importance of
    starting early. We can do better about informing the public
    about good legislation that has been passed, whether it is the
    one that you have been talking about or the SECURE Act.
        It is really importance for us to look at strong business
    owners like John Iacofano, who started his retirement plan for
    his employees today with 100 percent match. The more education
    we have, the better off people will be and the more we will
    enjoy those golden years.
        I want to thank Neri, my staff director, as well as my
    staff and Ben Hobbs who helped put this together for us today.
    Nothing happens by yourself. Nothing happens in a vacuum. We
    are really blessed to be surrounded with really highly educated
    individuals that are motivated to make sure that every single
    American has a better chance in retirement than they did before
    this hearing. Thank you for your hard work and I look forward
    to our next hearing.
        The Chairman. Ranking Member Scott, thanks very much.
        I want to reiterate what you said about our staffs. We are
    lucky. Stacy Sanders, who is over my left shoulder here,
    certainly fits that description of someone who works with her
    team to make these hearings informative and make it possible
    for us to have a hearing like we have had today.
        Senator Tim Scott. Mr. Chairman, I did mean to mention my
    other staff who is behind me as well, Sarah.
        The Chairman. I appreciate that. Thanks.
        If any Senators have additional questions for the witnesses
    or statements to be added, the hearing record will be kept open
    for 7 days until next Thursday, July 22nd.
        Again, I want to thank our witnesses for bringing their
    testimony today and making themselves available and especially
    bringing their expertise to bear, both personal and
    professional, on these issues that confront so many
    communities.
        Thank you all for participating today. This concludes our
    hearing.
        [Whereupon, at 11 a.m., the Committee was adjourned.]

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

                                    APPENDIX

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

                          Prepared Witness Statements

    =======================================================================
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

                               [all]