    [Senate Hearing 117-393]
    [From the U.S. Government Publishing Office]

                                                         S. Hrg. 117-393

                      RISE AND SHINE: IMPROVING RETIREMENT
                             AND ENHANCING SAVINGS

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

                                    HEARING

                                     OF THE

                        COMMITTEE ON HEALTH, EDUCATION,
                              LABOR, AND PENSIONS

                              UNITED STATES SENATE

                        ONE HUNDRED SEVENTEENTH CONGRESS

                                 SECOND SESSION

                                       ON

              EXAMINING IMPROVING RETIREMENT AND ENHANCING SAVINGS

                                   __________

                                 MARCH 29, 2022

                                   __________

     Printed for the use of the Committee on Health, Education, Labor, and
                                    Pensions

    [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

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

                                   __________

                        U.S. GOVERNMENT PUBLISHING OFFICE
    48-904 PDF                  WASHINGTON : 2023

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

              COMMITTEE ON HEALTH, EDUCATION, LABOR, AND PENSIONS

                        PATTY MURRAY, Washington, Chair
    BERNIE SANDERS (I), Vermont          RICHARD BURR, North Carolina,
    ROBERT P. CASEY, JR., Pennsylvania       Ranking Member
    TAMMY BALDWIN, Wisconsin             RAND PAUL, M.D., Kentucky
    CHRISTOPHER S. MURPHY, Connecticut   SUSAN M. COLLINS, Maine
    TIM KAINE, Virginia                  BILL CASSIDY, M.D., Louisiana
    MAGGIE HASSAN, New Hampshire         LISA MURKOWSKI, Alaska
    TINA SMITH, Minnesota                MIKE BRAUN, Indiana
    JACKY ROSEN, Nevada                  ROGER MARSHALL, M.D., Kansas
    BEN RAY LUJAN, New Mexico            TIM SCOTT, South Carolina
    JOHN HICKENLOOPER, Colorado          MITT ROMNEY, Utah
                                         TOMMY TUBERVILLE, Alabama
                                         JERRY MORAN, Kansas

                         Evan T. Schatz, Staff Director
                   David P. Cleary, Republican Staff Director
                      John Righter, Deputy Staff Director

                                C O N T E N T S

                                  ----------

                                   STATEMENTS

                            TUESDAY, MARCH 29, 2022

                                                                       Page

                               Committee Members

    Murray, Hon. Patty, Chair, Committee on Health, Education, Labor,
      and Pensions, Opening statement................................     1
    Burr, Hon. Richard, Ranking Member, a U.S. Senator from the State
      of North Carolina, Opening statement...........................     3

                                   Witnesses

    Koumantaros, Petros, Managing Director and CEO, Spectrum Pension
      Consultants; Co-Founder and Chairperson, GROUPIRA; Financial
      Consultant, intellicents, Seattle, WA..........................     6
        Prepared statement...........................................     9
        Summary statement............................................    21
    Rademacher, Ida, Vice President, Aspen Institute & Executive
      Director, Financial Security Program, Washington, DC...........    21
        Prepared statement...........................................    24
        Summary statement............................................    36
    Hounsell, Cindy, President and Founder, Women's Institute for a
      Secure Retirement (WISER), Washington, DC......................    37
        Prepared statement...........................................    38
        Summary statement............................................    43
    Chittenden, Doug, Head of Client Relationships, Teachers
      Insurance and Annuity Association of America (TIAA), Charlotte,
      NC.............................................................    44
        Prepared statement...........................................    46
        Summary statement............................................    53

                      RISE AND SHINE: IMPROVING RETIREMENT.
                             AND ENHANCING SAVINGS

                                  ----------

                            Tuesday, March 29, 2022

                                           U.S. Senate,
           Committee on Health, Education, Labor, and Pensions,
                                                        Washington, DC.
        The Committee met, pursuant to notice, at 10:02 a.m., in
    room 106, Dirksen Senate Office Building, Hon. Patty Murray,
    Chair of the Committee, presiding.
        Present: Senators Murray [presiding], Casey, Baldwin,
    Murphy, Smith, Rosen, Hickenlooper, Burr, and Braun.

                      OPENING STATEMENT OF SENATOR MURRAY

        The Chair. Good morning. The Senate Health, Education,
    Labor, and Pensions Committee will please come to order. Today
    we are having a hearing on how we can strengthen people's
    finances and improve their retirement security. I will have an
    opening statement and then we will introduce our witnesses.
    After the witnesses give their testimony, Senators will each
    have 5 minutes for a round of questions.
        We are again unable to have the hearing fully opened to the
    public or media for in-person attendance today. Live video is
    available on our Committee website at help.senate.gov. And if
    anyone is in need of accommodations, including closed
    captioning, reach out to the Committee or the Office of
    Congressional Accessibility Services. The COVID-19 pandemic
    upended our economy, and with it, the financial security of
    people across the country.
        I have heard from families in Washington State who are
    forced to raid savings meant for their futures just to make
    ends meet, savings for their kids' college fund, a down payment
    on a house, or for their retirement. And that is not even the
    half of it. Many people across the country have never even had
    to access--had never even had access to a retirement plan and
    never even been paid enough to make ends meet, let alone save
    for their future. COVID-19 was exactly the kind of crisis
    millions of families simply could not afford.
        That is why we worked in a bipartisan way in the CARES Act
    to give people more flexibility in managing their retirement
    resources and making ends meet during this crisis. It is why I
    worked in the American Rescue Plan to save workers and retirees
    from having the benefits they rely on slashed.
        It is why Ranking Member Burr, and I are now working to
    pull together bipartisan ideas in this space and move a
    retirement legislative package later this spring. I hope our
    discussion today will inform and improve these efforts, and our
    Democratic and Republican colleagues will continue to bring
    forward ideas over the next few weeks so we can build a good
    bipartisan package that helps workers, retirees, and families
    because it is painfully clear we need to do more to strengthen
    people's emergency savings and retirement security.
        When it comes to emergencies, financial experts say
    families with low incomes really need enough emergency savings
    to get through 6 weeks. Before this pandemic started, almost
    two in five Americans would struggle to get $400 in an
    emergency. We need to give workers and businesses tools that
    make it easier for families to put money away for a rainy day
    so that sudden expenses don't upend their lives in ways that
    undermine their finances for years to come.
        When it comes to our retirement system, it is clear
    retirement plans right now just aren't working for most
    Americans, when too many workers don't have access to one, when
    one in nine of those who do have access to a retirement plan do
    not participate in it, when one in six don't think their
    retirement savings will even last a decade, and when people
    often inadvertently lose retirement benefits when changing
    jobs.
        TIAA estimates 30 percent of Americans left their
    retirement account at their previous employer, and according to
    the Government Accountability Office, millions more have left
    two accounts behind, all to the tune of billions of dollars
    workers earned, saved for their future, and simply aren't able
    to use. We need to fix that, and I know Senator Warren and
    Senator Daines have a bipartisan bill to address this issue of
    lost and found retirement accounts.
        There are also ideas for how we can better increase
    participation in employer sponsored retirement plans through
    auto enrollment--auto re-enrollment, as well as bipartisan
    ideas for how we can get more people retirement options in the
    first place by building on the steps we took in the SECURE Act
    to make it easier for small businesses to offer quality
    retirement plans to their employees and expand which employees
    are eligible to participate in them. I pressed hard in our work
    on the bipartisan SECURE Act to make millions of part time
    workers eligible for their works' retirement plans, and I have
    continued pressing to make even more people eligible in my
    Women's Retirement Protection Act.
        I know Senator Casey and Senator Scott have a bipartisan
    bill on that as well. Of course, we also need to make sure that
    when people have retirement plans, they are given the tools
    they need to make the most of them as well. For example, tools
    to help people manage spending down their nest egg so they can
    make retirement resources last for the rest of their lives. And
    clear and complete information they need to make decisions that
    will affect their financial security for years to come.
        Unfortunately, a GAO report I requested found that fee
    disclosures currently provided by 401K plans simply are not
    cutting it. Looking at current fee disclosures, 4 in 10 people
    in a plan incorrectly believed they were not paying any fees,
    and the stakes are even higher for retirees when they are
    forced to consider whether to take a lump sum and trade a
    lifelong pension for a one time payout.
        GAO found financial disclosures people were given to
    consider these huge financial decisions often skipped details
    like how the value of the lump sum compared to their existing
    benefit, or the fact that accepting a lump sum would mean
    losing Federal protections. I have previously introduced
    legislation to change this. I hope we can get that done soon.
    Speaking of Federal protections, 401ks by far are the most
    common type of retirement plan, currently are not required to
    have spousal protections like defined benefit pension plans are
    required to have.
        These protections make sure a spouse cannot make decisions
    with huge financial consequences, like raiding a couple's
    retirement resources without their partner's knowledge and
    consent. I have called to strengthen these protections before
    and last week Senator Burr joined me in asking GAO to look at
    how steps like this could help people.
        When it comes to the issues we are talking about today, it
    is clear there is a lot of bipartisan interest in enhancing
    Americans' savings, improving their retirement planning
    options, and strengthening their financial security.
        I am hopeful today's hearing will help me, Senator Burr,
    and our colleagues on both sides of the aisle to put together a
    package that builds on the bipartisan SECURE Act we all worked
    to passed in 2019, and the bipartisan legislation the House has
    been developing with even more common sense steps to make our
    retirement systems work better for families in Washington State
    and across the Country.
        Of course, we all know emergency savings in retirement are
    just the tip of the iceberg when it comes to issues that can
    undermine people's financial security. There are big challenges
    throughout our economy, like low wages, pay discrimination,
    high costs for childcare, health care, burdensome student loan
    debt, and more, costs that, like investments, compound over
    time and set workers back by hundreds of thousands of dollars,
    in some cases millions by the time they reach retirement.
        In addition to steps to strengthen our retirement system
    and help families save lives, like we are talking about today,
    I am also going to continue pushing to bring down costs, make
    our economy work for working families. I would like to ask
    unanimous consent to enter three letters into the record from
    the insured retirement institute, the Spark Institute, and the
    Arisa Industry Committee. So ordered.

        [The above information was not submitted:]

        The Chair. With that, I will turn it over to Ranking Member
    Burr for his opening remarks.

                       OPENING STATEMENT OF SENATOR BURR

        Senator Burr. Thank you, Madam Chair. And I apologize to
    the Committee Members for my tardiness this morning. Madam
    Chair, I want to thank you for scheduling this hearing to
    highlight the need for Congress to consider legislation to
    encourage Americans to save more for their futures.
        It is not often we have hearings on the pension part of the
    HELP Committee, but as I look at my remaining 9 months in the
    Senate, I am very aware of the importance of working and saving
    toward a secure retirement. Our labor committee hook into
    retirement issues is ERISA, the Employment Retirement Income
    Security Act.
        ERISA set standards for retirement and health plans in
    private industry to protect individuals in these plans. The
    Finance Committee handles the Internal Revenue Code portion.
    Retirement bills require our Committee to work in concert so
    that ERISA and the tax code properly work together to help
    Americans save for their own retirement. As a Member of both
    HELP and Finance, I consider my office a one stop shop on
    retirement matters.
        Not only will I help shepherd of ERISA matters through this
    Committee, I will also shape the work of the Finance Committee.
    At our last hearing last year, we focused on defined
    contribution plans, the reliable superstar of the retirement
    world. Today, we will examine how we can make further
    improvements to these plans.
        At our last hearing--and the question before so simple,
    what is working well and what needs improvement? The answer is
    that the first question seems easy at the surface level. The
    system works great when you participate. The two most important
    words for secure retirement are compound interest. If you put a
    little money aside every paycheck and let it grow, your future
    retirement will be a lot better off.
        But the system doesn't work great when individuals don't or
    can't participate. What we need to do is help Americans and
    their employers offer, operate, and fund individual retirement
    plans. One option we will learn about from TIAA, which has a
    great North Carolina presence is as all smart companies should,
    is multiple employer plans.
        TIAA has picked up the mantle as an administrator and an
    advocate for the enhancement of these plans. Under these plans,
    employers pull together to gain efficiencies to reduce cost of
    an administration of plans. Less money spent on administration
    means more money being saved. Congress has been working to
    reinvigorate these pooled employer plans to get retirement
    plans out to the more and more worksites and employees,
    especially small business employees.
        The wonderful thing about defined contribution plans is
    that Americans who participate in them can pick a piece of
    paper and see at least two things, their name and an account
    balance. It is their money, and it is there. It is not a
    concept, it is not an accounting notation, doesn't require a
    bailout. It requires personal contributions, maybe an employer
    match, some basic financial knowledge, and then compound
    interest does the work. Here is the truth. Americans need to
    save more.
        The gap between the retirement savings that Americans have
    and the savings they need is already in the trillions of
    dollars and likely to grow. Not only are many Americans
    struggling to keep track of their savings needs, even more
    alarming is how many people have no savings at all outside of
    Social Security. The data we have seen says that the over one-
    quarter of non-retirees have nothing in their retirement piggy
    banks, many of whom are already nearing traditional retirement
    age.
        While the long term impact of the pandemic and economic
    lockdowns and the great resignation remain to be seen, we know
    that many Americans choose to tap into their retirement
    savings, draining assets from their intended retirement
    purposes. The bright side is that we have learned some good
    lessons.
        According to AARP, workers are 15 times more likely to save
    for retirement if they can make a payroll deduction to a
    savings plan at work. You don't spend what you don't see. We
    have also seen the success of automatic enrollment and employer
    matching to defined contribution plans. So the challenge to
    this Congress is finding ways to help employees and employers
    take advantage of the savings programs that already work.
        I look forward to hearing from today's panel about how to
    overcome the barriers individuals face in their own retirement
    planning, and the barriers employers face in offering
    retirement plans to workers. I hope throughout the process,
    Congress remembers that we shouldn't be trying to take our
    opinions--take our opinions of how to plan for the future and
    take the choices of retirement options away from individuals.
        The American people didn't send us here to be maternalistic
    or paternalistic and make their investment decisions for them
    or limit their choices. If we were all that good with planning
    ahead, we probably wouldn't have had a $30 trillion debt today.
        What I want the most is for Americans to control their own
    money, have safe options on how to invest and save, and live
    with a few Government and industry middlemen or middle women as
    possible. Madam Chair, I thank you. I look forward to our
    discussion.
        The Chair. Thank you very much, Senator Burr. Again, I want
    to welcome all of our witnesses today. We really appreciate all
    of you coming here. I will now introduce all of our witnesses,
    and I am pleased to welcome our first witness who has traveled
    here all the way from my home State of Washington.
        Petros Koumantaros is the managing Director and CEO of
    Spectrum Pension Consultants, the Co-Founder and Chairperson of
    Group IRA, and a Financial Consultant with Intellicents in
    Seattle. In these roles, he has experience working with
    investment advisors focused on retirement issues, employer
    sponsored retirement plans needing support with administration,
    record keeping and more, and people looking to better manage
    their retirement savings.
        Thank you for joining us today, Mr. Koumantaros. I am
    always delighted to have folks come out here from Washington
    State. Our next witness is Ms. Rademacher. She is Vice
    President of the Aspen Institute and Executive Director of the
    Aspen Financial Security Program in Washington, DC. Ms.
    Rademacher has led the program's efforts to consider how steps
    to address challenges, like growing wealth inequality and
    household financial insecurity, can support economic growth.
        Under her leadership, Aspen has developed important
    initiatives focused on looking at the forces that shape
    families' finances like work opportunities, retirement
    security, wealth inequality, and more. Ms. Rademacher,
    appreciate you joining us today to share your time and
    expertise. We will also be hearing from Cindy Hounsell, the
    President and Founder of the Women's Institute for a Secure
    Retirement.
        Founded in 1996, WISER works to improve opportunities for
    women to secure retirement income and educate the public about
    the inequities that disadvantage women in retirement.
        Ms. Hounsell also serves as Director of the National
    Resources Center on Women and Retirement, which WISER operates
    in partnership with the U.S. Administration on Aging. Ms.
    Hounsell, glad you could join us today. I look forward to your
    testimony. And our final witness will be introduced by Senator
    Burr.
        Senator Burr. Thank you. Thank you, Chair Murray, for the
    opportunity to introduce our North Carolina witness today. Doug
    Chittenden is head of TIAA's Client Relationship Team, which
    serves more than 15,000 retirement plan sponsors in the
    academic research, medical, and cultural fields. Doug has more
    than 30 years' experience at TIAA in a variety of positions.
        As head of client relations, he oversees sales strategy,
    service management, and guidance for institutional clients. His
    team is also responsible for managing relationships with key
    industry and advocacy organizations. TIAA has been in business
    for a long time, and they have a major presence in North
    Carolina.
        Last I heard, there were about 5,000 North Carolinians
    working for the company. Business would really be roaring if
    they moved all of their operations to North Carolina, but they
    are making good--they are making a good start. TIAA is most
    famous for providing retirement packages that serve the
    institutional community, historically teachers, but that is not
    all they do.
        What makes them a good witness for today's hearing is their
    support for pension research and their work with pooled and
    multiemployer employer plans. TIAA knows trends and they know
    principles of sound retirement. As all of our witnesses know,
    helping diverse employers provide retirement to employees is
    complex and important business, from recordkeeping to fiduciary
    duties to regulatory compliance.
        Congress needs the inside of the retirement industry so
    that we can continue to close the access and savings gaps. We
    are pleased to have you here today and we look forward to your
    testimony, Doug. Thank you. Thank you, Madam Chair.
        The Chair. Thank you. Welcome. And we will now begin our
    testimony. Our first witness will be Mr. Koumantaros. You may
    begin.

      STATEMENT OF PETROS KOUMANTAROS, MANAGING DIRECTOR AND CEO,
       SPECTRUM PENSION CONSULTANTS; CO-FOUNDER AND CHAIRPERSON,
       GROUPIRA; FINANCIAL CONSULTANT, INTELLICENTS, SEATTLE, WA

        Mr. Koumantaros. Thank you, Chair Murray, Ranking Member
    Burr, and all Members of this Committee for the opportunity to
    provide testimony in support of retirement security in America.
    My name is Petros Koumantaros, and I am a principal and
    shareholder in seven closely held financial services
    businesses.
        Collectively, these businesses work with 2,200 retirement
    plans, representing $9.2 billion in retirement plan assets, and
    support the needs of 97,000 retirement plan participants, the
    majority of whom work for small employers. My testimony today
    focuses on financial emergency savings, worksite financial
    planning and education, and views on how best to expand
    retirement plan coverage.
        The COVID-19 pandemic illustrated how ill-equipped many
    Americans were to manage financial emergencies. Among our
    clients, the incidence of financial hardship withdrawals in
    2020 increased by 280 percent when compared with 2019. We
    encourage Congress to consider financial emergency savings
    legislation with three key principles in mind.
        First, provide workers with penalty free access to
    financial emergency savings withdrawal from a retirement plan.
    Second, limit financial emergency savings to mitigate leakage
    from retirement plan accounts. And third, enable participants
    to repay financial emergency savings withdrawals when their
    financial circumstances improve. Another way to assist workers
    in saving for financial emergencies is to provide more
    resources for worksite financial planning.
        This Committee should consider a separate hearing on
    financial literacy. The fact is children can get a credit card
    before they learn how to manage debt. Children learn to consume
    and spend before they learn how to save and invest. Our
    children become adults, adults who enter the workforce ill-
    equipped to budget, invest, manage debt, and to save. That lack
    of knowledge contributes to the financial stress that plagues
    millions of Americans.
        The cost of financial stress and lost worker productivity
    and increased staff turnover is estimated at $500 billion
    annually. Indeed, my experience engaging with hundreds of
    employers and thousands of their employees confirmed worksite
    financial planning enhances both worker financial and emotional
    security.
        In support of those measures, we applaud proposed
    legislation that would allow incidental expenses related to
    retirement plan design to be treated as planned expenses, and
    we recommend that Congress act to pass legislation clarifying
    this status, and in the process, expand access to financial
    planning and education for working Americans.
        Among employers with more than 100 employees, 87 percent of
    workers had access to workplace retirement benefits. In
    contrast, among employers with fewer than 100 employees, only
    50 percent--58 percent of workers had access to workplace
    retirement benefits. And yet, there are 32.5 million small
    businesses in the United States, which represents nearly 50
    percent of the American workforce. Why this disparity?
        The greatest barriers to retirement planning adoption among
    small employers are first, the costs of workplace retirement
    plans, and second, the administrative complexities placed upon
    small employers. Legislation should address both of these
    barriers. For example, employers must provide several documents
    to retirement plan participants.
        We were pleased when the Labor Department permitted a shift
    in default delivery from paper to electronic mediums. One study
    found retirement plan participants costs could be reduced by
    $500 million annually by converting to electronic delivery.
        Unfortunately, some continue to press for an erosion in
    these efficiencies, not just for the employer, but for
    participant accessibility of this information, which in
    electronic form can be readily translated to languages other
    than English, as well as enhanced for those who are visually
    impaired.
        The reduction in cost and complexity of delivery, as well
    as the enhancements in participant accessibility, will
    encourage more small employers to establish workplace
    retirement plans, thereby expanding retirement plan coverage.
    In addition to lowering participant plan costs, Congress should
    also focus on increased retirement plan coverage.
        There are 25.8 million part time workers in America, nearly
    two-thirds of whom are female. Many not covered by current
    workplace retirement plan designs. The SECURE Act of 2019
    positively changed eligibility rules to require employers to
    provide access to retirement plans for long time--long term
    part time employees. In Senator Murray's Women's Retirement
    Protection Act, the legislation would enhance upon the SECURE
    Act provisions to provide access to an even greater number of
    part time workers.
        I believe it is important for even more workers to have
    access to a retirement plan, including those who do not work
    500 hours, and I would like the opportunity to discuss with the
    Committee how best to accomplish that.
        Beyond the ideas shared in my remarks, we support other
    legislative proposals discussed further in my written
    testimony. We look forward to continued collaboration with the
    Members of this Committee to preserve, protect, and expand the
    U.S. retirement system so that everyone can plan and save for a
    dignified financial future. Thank you.

        [The prepared statement of Mr. Koumantaros follows:]
                    prepared statement of petros koumantaros
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

                                     ______

                   [summary statement of petros koumantaros]
                                  Introduction
        Shares witness's professional background; summarizes the
    testimony's focal points.
                               Emergency Savings
        Highlights the problem of financial emergencies facing Americans;
    offers 3 principles of emergency savings legislation: penalty-free
    access, leakage mitigation, and repayment options; shares how to
    accomplish these principles administratively.
                   Worksite Financial Planning and Education
        Highlights how children do not learn about financial literacy;
    highlights how adults enter the workforce ill-equipped to budget,
    invest, manage debt, and save; highlights the problem and costs of
    financial stress; shares case study of how worksite financial planning
    is effective to enhance worker financial security; shares ideas to
    expand access to financial literacy, retirement readiness programs, and
    worksite financial planning.
           Coverage Expansion and Other Retirement Plan Enhancements
        Highlights the retirement plan coverage gap; identifies financial
    security challenges for part-time workers, particularly women; offers 2
    principles of coverage expansion legislation for small employers:
    reduce costs and administrative burdens; introduces the concept of a
    Universal Coverage Automatic Safe Harbor to expand coverage to part-
    time workers in exchange for simplified plan administration; offers
    suggestion to enhance Automatic IRA Rollovers by following Participant
    Directed Defined Contribution Plan Qualified Default Investment
    Alternative rules; offers suggestions to help locate missing
    participants and expand account portability through an employer safe
    harbor; shares the benefits of electronic delivery and disclosure of
    retirement plan documents and notices, including accessibility for non-
    English speaking Americans; suggests simplification of the 401(k) Basic
    Safe Harbor Match formula to make benefits easier for participants to
    understand; offers suggestions to expand tax credits for small employer
    retirement plan adoption.
                                   Conclusion
        Offers thanks to the Committee for its work on retirement security;
    offers to collaborate further.
                                     ______

        The Chair. Thank you very much.
        Ms. Rademacher.

    STATEMENT OF IDA RADEMACHER, VICE PRESIDENT, ASPEN INSTITUTE &
     EXECUTIVE DIRECTOR, FINANCIAL SECURITY PROGRAM, WASHINGTON, DC

        Ms. Rademacher. Thank you, Chair Murray, Ranking Member
    Burr, and Members of the Committee. Thank you for holding this
    hearing today. Retirement savings and savers have long been a
    bipartisan bright spot in Congress, and I am grateful to you
    for carrying that tradition forward. I am Ida Rademacher. I am
    a Vice President at the Aspen Institute and I lead our
    financial security program.
        Our goal is to make financial security a top national
    priority. And since our inception, retirement savings has been
    a pillar of that work toward building a more inclusive economy
    with reduced wealth inequality and more deeply shared
    prosperity. My written remarks include a broad list of the
    challenges and opportunities facing our Country's retirement
    savings system, including issues like portability and lifetime
    income.
        But I will focus my remarks today on the foundational role
    that retirement savings play in wealth creation, the importance
    of closing gaps in access to retirement savings, and the
    potential for boosting emergency savings through the retirement
    system. Retirement savings are one of the largest sources of
    household wealth in the United States, second only to home
    equity for most households in America.
        The wealth building potential is important not just for the
    rich. Everyone needs wealth to thrive. And our research team
    has found that wealth functions in a variety of ways in a
    person's life to provide resilience, choice, mobility, physical
    and mental well-being, dignity, and legacy. Too often
    conversations about retirement savings carry an implicit or an
    explicit assumption that low and moderate income households
    don't need savings because Social Security replaces much of
    their income.
        But given the critical role of wealth in the quality of
    life and the goals that we all have, the claim is false. It is
    essential that we build a retirement savings system that works
    for everyone. We still face a number of challenges, and far too
    many workers lack access to this powerful system. Account
    ownership and balances are distributed unevenly across
    socioeconomic groups, racial groups, generations, and gender.
        Of particular note, a disproportionate lack of access to
    workplace retirement savings has deepened the racial wealth gap
    in this country. In 2016, the typical Black household had 46
    percent of the retirement wealth of a typical white household,
    and Latino households had 49 percent of the retirement wealth
    of a white household. But there are promising solutions for
    policymakers to take action to begin to close these gaps.
        Further expanding coverage to additional part time workers
    is one of these solutions. This would help women in particular
    and women of color in particular, who are more than twice as
    likely as men to work in voluntary part time jobs. Expanding
    the market for multiple employer plans to include more workers,
    such as those that are nonprofit organization could also move
    the needle by lowering costs and providing economies of scale
    that are closer to those achieved by large businesses.
        Encouraging auto enrollment and retirement savings is
    another promising solution that would build off the success we
    have seen with automatic enrollment. And as workers change jobs
    with increasing frequency over the course of their working
    life, leaving a variety of small accounts scattered across
    different financial institutions, solutions like auto
    portability and a retirement savings lost and found data base
    are vital to ensure the retirement savings system is designed
    for the needs of the 21st century workforce.
        Finally, I want to raise the key opportunity for this
    Committee to consider to strengthen the retirement savings
    system and have it serve the greatest number of Americans
    successfully, and that is supporting households and saving for
    emergencies.
        A study that was released just last week by the Consumer
    Financial Protection Bureau deepened our understanding of the
    critical nature of emergency savings, finding that households
    with emergency savings were substantially less likely to
    overdraft, to take on high interest debt, or to withdraw early
    from their retirement savings.
        These findings corroborate recent research we initiated
    during the pandemic that found that households with at least
    $1,000 of emergency savings were half as likely to withdraw
    their workplace retirement savings accounts compared to those
    that didn't have any liquid savings.
        You have a particular opportunity to significantly boost
    emergency savings by allowing providers to offer automatic
    enrollment into workplace savings accounts in the same way the
    tool is used for retirement savings.
        When automatic enrollment became the standard feature of
    401k plans in the U.S., participation nearly doubled, with 93
    percent of new hires contributing. I am happy to answer more
    questions later and thank you for your time. I want to commend
    again the Committee for your leadership on this critical issue
    of retirement savings, and I look forward to the conversation.

        [The prepared statement of Ms. Rademacher follows:]
                      prepared statement of ida rademacher
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

                                     ______

                     [summary statement of ida rademacher]
        Ida Rademacher is Vice President at the Aspen Institute and
    Executive Director of the Financial Security Program (FSP). The
    Financial Security Program's mission is to illuminate and solve the
    most critical financial challenges facing American households and to
    make financial security for all a top national priority. Since its
    inception, retirement savings has been a pillar of its work.
               Retirement Savings is a Pillar of Wealth Building
        Aspen FSP researchers have found that the ability to build wealth
    provides resilience, enables investments in economic mobility, provides
    intergenerational support, supports health and quality of life, and
    provides a sense of ownership, voice, and control. But Americans lack
    equal access to the financial stability required for wealth building
    and the tools that can turn those resources into durable wealth. After
    home equity, retirement savings are the second largest source of
    household wealth in the United States. For everyone to have a secure
    retirement and the wealth that enables financial security, the US must
    build a retirement system that provides everyone access to retirement
    savings accounts with high-quality features, regardless of where they
    work or how much they are paid.
              Too Many Lack Access to Workplace Retirement Savings
        Approximately forty million workers in America currently lack
    access to a workplace retirement savings plan, and larger persistent
    gaps in access exist for workers of color, women, and low-income
    households. Solutions that would address parts of the retirement
    savings system's accessibility challenges include increasing the number
    of part-time workers who have access to retirement plans at work,
    allowing Multiple/Pooled Employer Plans (that have the potential to
    make offering retirement plans cheaper for smaller employers) to
    include workers at nonprofit organizations, and promoting automatic re-
    enrollment in retirement plans.
          A Lack of Portability Leaves the System in the 20th Century
        The average worker changes jobs 12 times over the course of a
    career, and those with access to 401(k) plans are faced each time with
    rolling over or cashing out their savings. Lost savings from job
    changes alone total between $60 billion and $105 billion each year.
    Creating an online ``lost and found'' data base to help workers locate
    lost or forgotten retirement accounts can provide a meaningful
    opportunity to help account holders reclaim the more than 16 million
    currently abandoned retirement savings accounts.
           Lifetime Income Streams in Retirement for All is Critical
        Routinely positive cash-flow is the foundation of financial
    stability and security, and people need better tools to turn nest eggs
    into lifetime income and information to navigate the decumulation phase
    of retirement. Policymakers should continue monitoring the developing
    market in this area.
    Emergency Savings Protects Financial Security and Safeguards Retirement
                                    Savings
        Emergency savings is a powerful safeguard against leakage from
    retirement savings: Aspen FSP recently found that households with at
    least $1,000 in emergency savings were half as likely to withdraw from
    their workplace retirement savings accounts during the pandemic.
    Unfortunately, existing emergency savings solutions do not meet the
    needs of millions of people because tools like automatic enrollment are
    seldom available for emergency savings in the way they are for
    retirement savings. Allowing for automatic enrollment in workplace
    emergency savings, in the same way retirement plans already
    successfully do, would boost short-term financial security and protect
    retirement savings.
                                     ______

        The Chair. Thank you very much.
        Ms. Hounsell.

      STATEMENT OF CINDY HOUNSELL, PRESIDENT AND FOUNDER, WOMEN'S
       INSTITUTE FOR A SECURE RETIREMENT [WISER], WASHINGTON, DC

        Ms. Hounsell. Good morning. Thanks to the Committee for
    inviting WISER to participate in today's hearing. I am Cindy
    Hounsell, President and Founder of the Women's Institute for a
    Secure Retirement. Our mission is to educate and inform women,
    so they are prepared financially and to support opportunities
    for them to secure adequate retirement income.
        This brief statement will cover why women, the National
    Resource Center on Women and Retirement, and three
    interventions that are workable solutions to the challenges
    that women face, emergency savings accounts, targeted
    retirement literacy, and auto portability. Why women? That is
    the question that we are often asked, and the answer is there
    are nearly 6 million more women than men at age 65 and almost
    70 percent of the over 85 population are female.
        Many of those in the 85 plus group end up living at the
    poverty level, even if they have never been poor before. While
    it is well-documented that many Americans are not prepared for
    retirement, the future for under-resourced women is alarming.
    Women have a more difficult time saving for reasons commonly
    acknowledged, lower wages, time spent either out of the paid
    workforce because of caregiving or working part time, which is
    why women make up nearly two-thirds of part time workers, 64
    percent.
        Also telling a big part of the story is that while women
    are 46 percent of the total labor force, they make up 69
    percent of low wage workers. These women have little access to
    benefits or financial wellness programs. Many also work all
    their lives with little to no savings to show for it. Yet, the
    financial hardships due to the COVID economy highlight the
    importance of having a cash cushion to get through hard times.
        The research finds that working women want to take control
    of their finances and their retirement. They want access and
    they want more financial education. They want to know how to
    overcome the knowledge gap. Since women generally live longer,
    they need to have more savings that will last longer.
        Emergency savings are foundational building blocks for the
    unbanked and for moderate low income women, as well as for many
    employees who just agree that they want to enroll in a
    workplace emergency savings program with payroll deduction if
    offered by their employer.
        The findings from the Federal Reserve finding the 39
    percent that were unable to cover a $400 unexpected bill has
    highlighted the need for policymakers to make workers--to help
    workers to save more and to find ways to use the employer plan
    structure to make it less burdensome, with linked emergency
    fund accounts.
        WISER's focus is on expanding its turnkey emergency fund
    model with the credit unions for at-risk women to establish
    accounts and begin saving. Encouragingly, these model programs
    help these groups of women access matched savings accounts,
    allowing them to better their finances.
        The National Resource Center on Women and Retirement is
    WISER's key Initiative. It is a national clearinghouse, and
    through our partners, we have access to diverse groups of women
    to train trainers in their communities by providing helpful
    resources and experts to lean on. We have directly reached
    hundreds of thousands of women through these workshops and our
    partners and reached millions with our publications.
        Our target populations include women from many job
    categories and from many demographic groups. What they all have
    in common is they want access to basic, trustworthy financial
    information, and access to accounts and how to deal with the
    various financial decision points along the way.
        Their message quite simply is, tell me what I need to do
    and show me how to do it. A recent report finds that $400
    billion has left the retirement system since 2015. That
    headline points to the importance of a tech based solution
    developed by the retirement clearinghouse. It ensures that when
    someone changes jobs, their 401k savings move automatically
    from the old plan to the new plan, even if their assets are
    less than $5,000.
        That allows their savings to continue to grow in one easy
    to monitor consolidated investment account. The best thing
    about AP is that the more financially challenged demographic
    groups, those with the smaller balances, lower their cash out
    rates more than other groups when it is a feature of the plans.
        In conclusion, WISER helps workers do the best they can
    within the system that we have now, by providing financial
    literacy and capability programs, educating and advocating for
    a much needed and simplified savers tax credit, and helping
    women without access to a workplace retirement plan to be able
    to build emergency funds.
        Thank you for listening.

        [The prepared statement of Ms. Hounsell follows:]
                      prepared statement of cindy hounsell
                                  Introduction
        Good morning. I am Cindy Hounsell, President of the Women's
    Institute for a Secure Retirement (WISER), a 25-year-nonprofit
    organization that helps women, educators and policymakers address the
    complicated issues that affect women's planning for their long-term
    financial security.

        Thank you to the Committee for inviting WISER to participate in
    today's hearing on improving retirement and enhancing savings. WISER is
    dedicated to the education and advocacy that will improve the long-term
    financial quality of life for women.

        As the only organization to focus exclusively on the unique long-
    term financial challenges that women face, WISER's mission is to
    educate/inform women so they are better prepared financially and to
    support opportunities to secure adequate retirement income; we do that
    through direct education, workshops, partnerships, innovative programs
    and research.

        WISER has spent most of its formative years working with diverse
    groups of women and training-trainers to make sure that there is
    community buy-in and the ability to follow-up with experts. Black
    women, Latino and Native American women in communities have been
    prominent in our work. While coverage and access to retirement programs
    for underserved women are difficult to find our Aging Network partners
    have helped WISER promote programs to encourage low-income women to
    participate in incentivized savings accounts.

        WISER also supports workable solutions to the challenges women
    face--WISER's statement will describe three of those important
    interventions: (1) Emergency Savings Accounts are foundational
    representing an important step toward financial well-being; (2)
    Targeted Retirement Literacy is linked to overall financial well-being
    yet women generally have lower levels of financial literacy; WISER's
    programs address the literacy and capability gaps; and (3) Auto-
    portability a technology based solution to prevent workers who change
    jobs from cashing out their retirement savings. The more financially
    challenged demographic groups--those with the smaller balances--lower
    their cash-out rates more than other groups when auto portability is a
    feature of the plans.
                                   WHY Women?
        WISER is often asked about the focus on women? The response is the
    numbers-there are 5.8 million more women than men at age 65, and 67
    percent of the over age 85 population are female. \1\ Many of those in
    the 85+ group end up living alone in near or at the poverty level, even
    if they have never been poor before.
    ---------------------------------------------------------------------------
        \1\  Administration for Community Living, 2020 Profile of Older
    Americans, May 2021.

                  Issues Affecting Women's Retirement Security
        Women have a more difficult time accumulating retirement savings
    than their male peers for reasons commonly acknowledged: lower wages
    and time spent either not working or working part time due to
    caregiving responsibilities. While 46 percent of the total labor force
    are women, they make up 69 percent of low wage workers. Women make up
    two thirds of caregivers and they make up 64 percent of part time
    workers. We do not yet know the full impact of COVID on these figures.

        Lower wages, gaps in earnings, and part time employment translate
    into less retirement savings and most likely lower Social Security
    benefits. The fact that women generally live longer than men makes it
    harder since they need to make their savings last longer and to avoid
    mistakes.

        Women want to take control of their retirement. Research shows that
    while women report a lack of confidence and knowledge about financial
    matters, they say they want more education, more information to help
    ensure a secure future. They want to know how to overcome the knowledge
    gap and the investment gap and to know how to spend down and protect
    their savings and learn about annuities and making their money last.

        Yet, while the research also documents that many Americans are not
    financially prepared for retirement, the future for under-resourced
    women is especially alarming. Women are overrepresented in the low-wage
    workforce, with little access to benefits or financial wellness
    programs. These low-to moderate-income (LMI) women often work all their
    lives with little to no savings to show for it, and are more likely
    than men to live out their lives in poverty.

        Encouragingly, emergency fund model programs focused on helping
    these groups of women access matched savings accounts allow them to
    better their finances.
                           Emergency Savings Accounts
        Emergency savings are foundational building blocks for the unbanked
    and for moderate and low-income women as well as for many employees who
    are willing to agree that they want to enroll in a workplace ``rainy
    day'' emergency savings program with payroll deduction if offered by
    their employer. \2\ Yet, there are many obstacles that can get in the
    way of accumulating savings for one's future, for example, inadequate
    income, competing financial demands (debt, unexpected expenses, helping
    family), lack of access to banks or other financial institutions, lack
    of financial knowledge, or simply failing to focus on or prioritize
    saving.
    ---------------------------------------------------------------------------
        \2\  Harvey, C., John, D., & Brown, K.(2018) Saving at work for a
    rainy day: Results from a national survey of employees (AARP Public
    Policy Institute Report).

        WISER's focus is on expanding its turn-key emergency fund model
    with the credit unions for the most at-risk women to establish accounts
    and begin saving. The findings from the Federal Reserve research found
    that 39 percent of Americans would not be able to cover a $400
    unexpected bill. This statistic has highlighted the need for
    policymakers to help workers save more and to find ways to use the
    employer plan structure to make it less burdensome with linked
    accounts.
                   Targeted Financial Literacy and Capability
        Research shows that women generally have lower levels of financial
    literacy than men; yet literacy is linked to overall financial well-
    being. \3\ Understanding the basics of the complicated financial world
    is important in order to make the most of one's income, especially for
    those without access to information or financial literacy programs.
    When provided with basic, practical financial education that emphasizes
    that financial goals are achievable, workers can become better
    consumers and improve their financial situation. An early definition of
    financial literacy by the National Endowment for Financial Education
    (NEFE) follows: ``the development, acquisition, maintenance, and
    conservation of scarce resources that allow families and individuals,
    as they interact with the world around them, to better their levels of
    living.''
    ---------------------------------------------------------------------------
        \3\  Yakoboski, Paul J., Annamaria Lusardii; & Hassler, Andrea,
    TIAA Institute-GFLEC Personal Finance Index (P-Fin Index), Financial
    Literacy and Wellness among U.S. Women: Differences among
    Underrepresented Minority Women, November 2020.
    ---------------------------------------------------------------------------
        The National Resource Center on Women & Retirement (The Center)
        WISER's key initiative is a program administered cooperatively and
    funded by the Administration on Community Living's, Administration on
    Aging--the National Resource Center on Women and Retirement (the
    Center). The Center operates as a national clearinghouse of tools and
    information on retirement planning to improve the financial knowledge
    of the Center's population of vulnerable women by helping them plan and
    achieve retirement security. WISER presents financial workshops to
    diverse groups of women across the country.

        The Center creates publications that explain the complexity of
    women's retirement issues: claiming Social Security, signing up for
    Medicare, emergency savings programs, caregiving issues, divorce,
    widowhood, long-term care and elder financial abuse. Most women cannot
    afford even the smallest mistakes, and they often encounter life events
    that have a significant impact on their financial lives, such as
    divorce and widowhood. The Center provides the information and tools
    needed to navigate these situations to assist in their critical
    decision-making.

        Through our collaborations we have access to diverse groups of
    women, we train-trainers in their communities by providing helpful
    resources. The Center has directly reached hundreds of thousands of
    women through WISER's and our partners' workshops and we've reached
    millions with our partners' publications, media, social media and
    website. WISER has also collaborated through partnerships with
    government agencies such as the Social Security Administration, the
    Consumer Financial Protection Bureau, and the Securities and Exchange
    Commission.

        Success in reaching these groups has resulted from the partners
    developed along the way and the adaptability and flexibility needed to
    make the programs work. Vickie Elisa, our Atlanta partner was
    successful in educating the women in her Mothers' Voices programs for
    African Americans--teaching about workplace benefits and retirement,
    and motivating the women to save--importantly, Vickie helped them
    believe that they could have a stable financial life; she persuaded
    them in part by sharing her own story of similar financial challenges.
    The women saw Vickie and her nonprofit as an agent of change and a
    `trusted messenger.'

        Amy Hinojosa, President & CEO of MANA, A National Latino
    Organization with its 25+ chapters and affiliates, formed a strategic
    partnership with WISER to deliver financial education at the community
    level with a similar training-trainers model. Over the last decade, The
    MANA Financial Literacy Leadership Institute Training has trained more
    than 350 Hispanic community trainers from 26 cities and 16 states.
    These trainers have facilitated over 900 community workshops for more
    than 15,000 Hispanic women.
               What We Know Works for Helping Women Save and Plan
        Throughout WISER's experience of providing education and
    programming, we have learned what women want and what works in reaching
    underserved audiences. Our target populations served over the years
    include low-to moderate-income women, Latino, Black women and Asian
    women, Native Americans, caregivers, women going through divorce,
    widows, nurses, independent workers, childcare workers, and home health
    workers; and those who traditionally have not had access to retirement
    and financial information. What they all have in common is they want
    easy access to basic, trustworthy financial information, and how to
    deal with the various financial decision points along the way. Quite
    simply, ``tell me what I need to do and how to do it.''

        But simply having good materials and resources is not enough. It is
    important to adapt the information to meet the unique needs of each
    audience and deliver it in a way that creates trust and develops
    confidence in one's ability to succeed in building financial security.
                               Retirement Income
        How much will women need? The percent of a worker's pre-retirement
    income needed to maintain retirement security depends on the
    circumstances of each individual household. \4\ Access to retirement
    income is based on a woman's work life, her earnings, savings, and her
    marital status. But during their working years, women generally earn
    less because of the gender pay gap, because they have diverse work
    patterns and education levels, and are overrepresented in the low-wage
    workforce without access to adequate workplace benefits. The results
    are women having less in savings, less in Social Security benefits and
    less in workplace retirement savings accounts. \5\ It is important for
    all workers to know that Social Security benefits only cover 40 percent
    of preretirement income for the average worker.
    ---------------------------------------------------------------------------
        \4\  GAO, Retirement Security: Better Information on Income
    Replacement Rates Needed to Help Workers Plan for Retirement, GAO-16-
    242, Washington, DC, Mar. 1, 2016.
        \5\  For summary information on the gender pay gap see WISER's
    Press Release from Pay Equity Day 2019 at: https://www.wiserwomen.org/
    images/imagefiles/Equal%20Pay%20Day%202019%20PressRelease.pdf.

        The average annual Social Security benefit for retired women
    workers in 2020: $16,536 compared with $20,568 for men. \6\ Overall,
    women aged 65+ have 30 percent less retirement income than men, \7\ yet
    they need more income to support the costs of living longer. \8\
    ---------------------------------------------------------------------------
        \6\  Social Security Administration, Annual Statistical Supplement
    August 2018.
        \7\  GAO. Retirement Security: Women Still Face Challenges. GAO-12-
    699. July 9, 2012.
        \8\  GAO. Retirement Security Older Women Report Facing a
    Financially Uncertain Future. GAO-20-435. August 13,2020.

        To make matters worse, women have been disproportionally affected
    by the economics of the Covid pandemic; millions losing and leaving
    jobs, accumulating debt, and worsening their previous financial
    situations thus making it more difficult to pay monthly bills or cover
    unexpected expenses. \9\ Also, problematic for many women is not
    knowing what they need to know to make the best financial decisions, or
    to take advantage of benefits they might miss out on. The recent
    financial hardships due to the COVID-19 economy highlight the
    importance of having a cash cushion to get through times of
    unemployment or reduced hours. Working harder is not a realistic
    solution, however, for many women in this target population already
    work more than one job at a time.
    ---------------------------------------------------------------------------
        \9\  2021 TIAA Institute-GFLEC Personal Finance Index. Demographic
    Variations in Financial Literacy Race, /Ethnicity and Gender.
    ---------------------------------------------------------------------------
         Unique Challenges: Longevity Risks, Health Care and Caregiving
        Longevity Risks & Health Care Costs: Women confront other
    retirement income challenges which are long-lasting due to their
    longevity and health care costs. Longevity risks include inflation,
    loss of spouse, poverty and health care costs which have a
    disproportionate harm on women's retirement income. Many women are
    unaware of these facts and what services Medicare and Social Security
    actually provide. In fact, many families are not aware that Medicare
    does not cover most long-term care costs or that Medicare premiums have
    to be paid and are subtracted from their Social Security benefits's.
    The premiums are now more than 10 percent of the average woman's
    monthly benefit--causing an income shortfall for the many women relying
    on their Social Security benefit for most of their income.

        Caregiving: Currently, there are 53 million family caregivers, and
    the majority are women. Women generally and as caregivers are spending
    on average 9 years out of the paid workforce. \10\ Those 9 years mean
    zero earnings, or a career of 29 years compared to men's 39-year
    careers. The zero earnings are compounded in the 35-year calculation of
    their Social Security benefit. In addition, women, because of their
    need for flexibility for caregiving, are twice as likely to work on a
    part-time basis as are men, with the resulting lower earnings. Women
    are also more likely to work in industries that pay lower salaries and
    have no retirement plans or less generous retirement plans.
    ---------------------------------------------------------------------------
        \10\  Women's Institute for a Secure Retirement, Ten Facts About
    Women and Caregiving, 2019.

        Financial Caregiving: Women with compromising work schedules are
    leaving the labor force or working part-time to accommodate family
    needs. Recent research studying the financial effects of caregiving
    found a majority of women/caregivers have given little/or no thought to
    their own financial situation, while over half describe their financial
    position as fair or poor. \11\ Another study shows that single women
    who care for elderly parents are 2.5 times more likely than other
    caregivers to live in poverty in retirement. \12\
    ---------------------------------------------------------------------------
        \11\  Transamerica Institute, The Many Faces of Caregivers: A
    Close-Up Look at Caregiving and Its Impacts (2017) Hereafter TI at 196.
        \12\  Donato, Katharine and Wakabayashi, Chizuko: Women Caregivers
    are More Likely to Face Poverty, Sallyport, Magazine of Rice University
    Vol. 61 No.3. Spring 2005.

        The financial consequences are serious \13\ but understanding the
    financial implications of these decisions allows for better planning
    and more opportunities for preserving retirement income and affording
    health benefits. However, financial caregiving also has consequences
    for both the caregiver and the care recipient who needs help with
    managing their financial affairs. \14\ More than one in five caregivers
    provide both financial management and out-of-pocket support ($7,242+
    annually) \15\ to their care recipients with two-thirds of family
    caregivers reporting they could benefit from financial advice on
    managing money. \16\
    ---------------------------------------------------------------------------
        \13\  Id TI at197&199.
        \14\  Merrill Lynch,``The Journey of Caregiving.''(2017) Hereafter
    ML at 22 and Figure 9.
        \15\  AARP, ``2021 Caregivers Out-of-Pocket Costs: Study and Fact
    Sheet, by Laura Skufca and Chuck Rainville, June 2021.
        \16\  ML at 24.
    ---------------------------------------------------------------------------
                       Auto Portability--A Positive Step
        A recent report finds that $400 billion has left the retirement
    system since 2015 \17\ That headline points to the importance of a
    fairly new retirement savings feature--a technology-based solution
    developed by the Retirement Clearinghouse. It ensures that when someone
    switches jobs (which 14.8 million workers do annually), their
    401(k)'savings moves automatically from their previous employer's plan
    to their new employer's plan, even if their assets are less than
    $5,000. That allows their savings to continue to grow in one easy-to-
    monitor, consolidated investment account.
    ---------------------------------------------------------------------------
        \17\  Morningstar Report: Retirement-Plan-Landscape-Report.

        Studies indicate that over a 40-year period, auto portability could
    decrease cash-outs to such a degree that it could add as much as $1.5
    trillion to $2 trillion to Americans' retirement savings \18\. And much
    of that savings will belong to the people who need it most.
    ---------------------------------------------------------------------------
        \18\  EBRI, The Impact of Auto Portability on Preserving Retirement
    Savings Currently Lost to 401(k) Cashout Leakage, Issue Brief Number
    489, August 15, 2019.

        Without auto portability, 50 percent of workers who earn between
    $20,000 and $30,000 cash out within a year when changing jobs. Sixty-
    three percent of Black and 57 percent of Hispanic workers also cash
    out, as do 41 percent of women. Among women, 71 percent percent who
    cash out are women age 25-34. But auto portability changes that. The
    more financially challenged demographic groups--those with the smaller
    balances--lower their cash-out rates more than other groups when auto
    portability is a feature of the plans. \19\
    ---------------------------------------------------------------------------
        \19\  Retirement Clearinghouse, New Data Proves the Effectiveness
    of 401(k) Auto Portability, July 27,2021.
    ---------------------------------------------------------------------------
                                   Conclusion
        WISER's focus is to help workers do the best they can within the
    system we have now by providing Financial Literacy & Capability
    programs, educating and advocating for the much-improved Saver's Tax
    Credit, preserving savings through auto portability and helping women
    to build emergency funds. We have recently been working with employers
    to expand information about Medicare & Social Security and encourage
    signing up for a mySocialSecurity account as most of the workforce no
    longer receives annual Social Security statements. Our work with the
    Society of Actuaries has helped us teach women about the longevity
    issues and how to mitigate paying for extra years by providing an
    understanding of annuities.

        As a nation with an aging population, we need to educate the public
    on strengthening our existing retirement programs wherever possible.
    That means focusing especially on the links to both Social Security and
    Medicare, and educating average workers about how these systems work to
    prevent penalties and loss of benefits.

        Below is a list of key issues that most workers need to know:

            (1) Longevity risk is poorly understood and not widely planned
            for and yet we are an aging society.

            (2) Many individuals struggle to plan how they will draw down
            assets and need greater access to flexible income distribution
            options and guaranteed lifetime income options.

            (3) The impact of future inflation and taxes is often not
            included in planning for retirement despite the significant
            impact it can have on retirement income--think 10 years after
            retirement.

            (4) Individuals are often confused about how much is needed to
            cover their expenses in retirement. Benchmarks would be
            helpful.

            (5) Many women assume they will just keep working beyond normal
            retirement age, but more than 40 percent of Americans end up
            retiring earlier than they planned to, usually due to job loss,
            family caregiver needs including health issues, or personal
            poor health.

        Planning for retirement is effective and workplace seminars are
    helpful, but there is a need for basic resources to help people figure
    out how much they may need to increase their savings in order to retire
    with the ability to cover their expenses.

        The following are suggested actions for building and supporting
    increased economic and financial security for all workers:

              Provide basic benchmarks so people are not confused
            about their full retirement age and when to sign up for
            Medicare;

              Improve programs for those with very low benefits
            such as those who are primarily low-wage, unmarried and widowed
            women;

              Provide some form of longevity bump-up for those age
            85+;

              Study ways to offer retirement protection to women
            with significant time spent as caregivers, including the
            possibility of a provision for Social Security credits and
            credits for out-of-pocket expenses that may be preventing women
            from saving;

              Provide all workers access to Social Security
            estimated benefit statements;

              Expand retirement savings opportunities and emergency
            savings;

              Improve the Savers Tax Credit and make it a staple of
            retirement saving for middle-income as well as for moderate-and
            low-income workers;

              Enhance knowledge of the three pillars of the
            Nation's retirement systems (Social Security, employer-provided
            retirement plans, and personal savings) by helping individuals
            understand the importance of having access to each of the
            pillars; and

              Help individuals learn what they need to know about
            their Social Security benefits, about preserving their employer
            sponsored benefits and about taking advantage of individual
            savings programs available to them.
                                     ______

                     [summary statement of cindy hounsell]
        The Women's Institute for a Secure Retirement (WISER), is a 25-
    year-nonprofit organization whose mission is to educate/inform women so
    they are better prepared financially and to support opportunities for
    women to secure adequate retirement income.

        Women have a more difficult time accumulating retirement savings
    than their male peers for reasons commonly acknowledged: lower wages
    and time spent either not working or working part-time due to family
    and caregiving responsibilities. With longer life-expectancies women
    have a greater need to save more for retirement. However, they face
    significant obstacles to successfully building wealth.

        The National Resource Center on Women & Retirement: WISER's key
    initiative is a national clearinghouse administered cooperatively and
    funded by the U.S. Administration on Aging--The Center features tools
    and information on retirement planning to improve the financial
    knowledge of the population of vulnerable women by helping them plan
    and achieve retirement security.

        WISER offers direct education, workshops, partnerships, innovative
    programs and research. WISER works with diverse groups of women and
    trains-trainers to make sure that there is community buy-in and the
    ability to follow-up with experts. Black women, Latino and Native
    American women in communities have been prominent in our work.

        WISER's comprehensive information explains the complexity of
    women's retirement issues: claiming Social Security, signing up for
    Medicare, emergency savings programs, caregiving issues, divorce,
    widowhood, long-term care and elder financial abuse. Most women cannot
    afford even the smallest mistake, and they often encounter life events
    that have a significant impact on their financial lives, such as
    divorce and widowhood. The Center provides the information and tools
    needed to navigate these situations to assist in decision-making.

        Through our collaborations we have access to diverse groups of
    women, we train-trainers in their communities by providing helpful
    resources. The Center has directly reached hundreds of thousands of
    women through WISER's and our partners' workshops and we've reached
    millions with our partners' publications, media, social media and
    website. WISER has also collaborated through partnerships with
    government agencies such as the Social Security Administration, the
    Consumer Financial Protection Bureau, and the Securities and Exchange
    Commission.

        WISER supports workable solutions to the challenges women face--
    WISER's statement will describe three of those important interventions:
    (1) Emergency Savings Accounts are foundational representing an
    important step toward financial well-being; (2) Targeted Retirement
    Literacy is linked to overall financial well-being yet women generally
    have lower levels of financial literacy; WISER's programs address the
    literacy and capability gaps; and (3) Auto-portability a technology
    based solution to prevent workers who change jobs from cashing out
    their retirement savings. The more financially challenged demographic
    groups--those with the smaller balances--lower their cash-out rates
    more than other groups when auto portability is a feature of the plans.
                                     ______

        The Chair. Thank you very much.
        Mr. Chittenden.

      STATEMENT OF DOUG CHITTENDEN, HEAD OF CLIENT RELATIONSHIPS,
     TEACHERS INSURANCE AND ANNUITY ASSOCIATION OF AMERICA [TIAA],
                             CHARLOTTE, NC

        Mr. Chittenden. Good morning, Chair Murray, Ranking Member
    Burr, distinguished Members of the Committee, and thank you for
    inviting me to speak today on the critical issue of retirement
    security. My name is Doug Chittenden. I am head of Client
    Relationships at TIAA, where we provide retirement services to
    5 million employees and more than 15,000 employers in the not
    for profit community.
        I especially want to thank Ranking Member Burr, my home
    state Senator, for inviting me to testify today, and I am proud
    to be part of the more than 5,000, and growing, employees TIAA
    has in North Carolina. I want to commend the HELP Committee for
    its bipartisan efforts to advance proposals designed to enhance
    retirement savings for American workers. our Country's
    retirement savings system has evolved over time.
        Today, I will share some steps Congress can take to
    continue to ensure we have an effective system. The first, in
    our view, most important step is expanding access to lifetime
    income solutions in employer sponsored retirement plans, and
    most specifically, those that would provide the highest returns
    for retirement investors.
        Over the years, the retirement system has shifted from a
    pension plan and defined benefit structure, where employers
    would provide guaranteed income in retirement, to one that is
    designed more to focus on accumulation of assets through
    defined contribution plans. This has transferred the risk of
    making investment decisions and providing retirement income
    from the employer to the worker.
        The result is Americans face a projected $4 trillion
    retirement income gap and more than 40 percent of households
    are forecasted to exhaust their savings during retirement. To
    address this gap, defined contribution plans are evolving to
    increase in plan access to guaranteed lifetime income solutions
    through annuities.
        Annuities are a vital and sensible solution as they provide
    pension like income in retirement, as well as guaranteed
    returns in the saving stage. Because most retirement savers
    today are defaulted into an investment option in their plans,
    it is important that employers have the option to incorporate
    the best annuities into these default options.
        Unfortunately, current regulations discourage employers
    from including the most effective lifetime income options on
    their plan menus. Fixed annuities with delayed liquidity
    features would offer retirees the potential for higher returns
    in retirement income as a part of a default investment option.
        TIAA is asking Congress to amend the Department of Labor's
    default investment regulations to provide employers with more
    latitude in designing their default investments. A bipartisan
    House bill, the Life Income for Employees Act, would amend the
    regulations to allow a guaranteed lifetime income component
    with delayed liquidity features as a default investment option.
        This legislation would expand the options available to
    employers in their selection of an appropriate default
    investment for their employees. For employers looking to
    established the guaranteed income features that were a hallmark
    and defined benefit pensions, this bill would give them a much
    needed tool to offer personal pensions to their workers.
        This is vital to addressing the future lifetime income
    needs of retirement savers. We asked the Committee to consider
    modernizing these regulations. Congress can also take steps to
    increase access to retirement savings plans.
        One of the biggest deterrents to small employers adopting
    retirement plans is the cost of starting, administering, and
    maintaining the plan. The SECURE Act took steps to address this
    by enacting improvements to multiple employer plans, MEPs, or
    pooled employer plans, PEPs. MEPs and PEPs make it easier for
    small employers to leverage economies of scale and join a
    single retirement plan.
        Unfortunately, not for profit employers were not included,
    but proposals being considered by this Committee and others
    would fix that. We have been encouraged by how some of our
    clients have come together and improved upon their existing
    retirement plans using the MEP structure as it exists today.
    Other steps that could be taken include improving access to
    plans for long term part time workers, simplifying plan
    disclosures, and increasing incentives for starting plants.
        Finally, improving retirement savings should be an
    additional area of focus. A recent study found one in four
    Americans have no retirement savings, and those who are saving
    are not saving enough. There are several ways this can be
    addressed.
        These include increasing the use of automatic enrollment
    features, which have been very successful at assisting
    Americans to save more, allowing for employers to make matching
    contributions based on payments employees are making on their
    student loans, and helping those who leave the workforce to
    care for family members catch up on missed savings
    opportunities.
        I commend you Chair Murray and Ranking Member Burr for
    holding this hearing today. Thank you for the opportunity to
    testify. On behalf of TIAA's 5 million retirement plan
    participants and 15,000 employers, thank you for your
    bipartisan commitment to improving and modernizing the current
    retirement system. And I look forward to answering your
    questions.

        [The prepared statement of Mr. Chittenden follows:]
                     prepared statement of doug chittenden
                                  Introduction
        Chair Murray, Ranking Member Burr, distinguished Members of the
    Committee, thank you for inviting me to speak with you today on the
    critical issue of retirement security.

        My name is Doug Chittenden, Senior Executive Vice President and
    Head of Client Relationships at TIAA, where I work with my team to
    provide retirement services to five million employees at more than
    15,000 employers in the academic, research, medical and cultural
    fields. I especially want to thank Ranking Member Burr, my home state
    Senator, for inviting me to testify today. TIAA is proud of the more
    than 5,000 employees we have in North Carolina who work hard every day
    to help millions of Americans retire securely. Additionally, we are
    honored to manage the assets of more than 120,000 individuals across
    the state of North Carolina, including employees of Wake Forest. Chair
    Murray, we also proudly serve in the State of Washington, including
    your alma mater Washington State University, and are helping 97,000
    Washington State residents prepare for retirement.

        I also want to acknowledge Chair Murray, Ranking Member Burr and
    the other Members of the HELP Committee for your ongoing bipartisan
    efforts to develop and advance legislative proposals designed to
    enhance retirement savings for American workers. Bipartisanship has
    long been the hallmark of successful retirement system improvements,
    going back as far as the passage of the Employee Retirement Income
    Security Act in 1974 to the Pension Protection Act of 2006 and as
    recently as the enactment of the SECURE Act in 2019.

        TIAA believes these past retirement improvement efforts have been
    successful in helping many American workers. In my testimony, I will
    share why we believe more can and should be done to improve the
    retirement system in a meaningful and holistic way. We are excited to
    see the ongoing cooperation between the Senate and the House to enact
    additional comprehensive retirement improvements, as evidenced by this
    hearing today at the same time the House is advancing its own package
    of bipartisan retirement savings enhancements. More broadly, I am here
    to ask Congress to help foster innovation and provide additional tools
    to help more Americans attain a financially secure retirement.
              Providing Lifetime Income is Part of TIAA's Mission
        Over its century-long history, TIAA's mission has always been to
    aid and strengthen the institutions and individuals it serves by
    providing financial products that meet their needs. We keep our clients
    at the center of everything we do, managing their retirement savings
    with a long-term perspective in mind to help them achieve financial
    well-being throughout their lifetime. In fact, we are proud to say that
    we have paid out more than $500 billion in benefits to our clients
    since 1918, money they worked hard to save to help them attain a secure
    retirement.

        Our past experience informs our current efforts to further
    strengthen the retirement savings system for the next 100 years. While
    many aspects of the existing retirement system have been successful at
    providing financial security, we can still take steps to improve and
    enhance it. In this regard, three key areas of focus would help improve
    retirement security for all Americans: (1) expanding access to lifetime
    income solutions; (2) increasing access to retirement savings plans;
    and (3) enhancing retirement savings rates. My testimony today will
    focus on these three policy goals and the specific actions that
    Congress can take to help more Americans gain access to a secure
    financial future and retire with dignity.
             Recommendation #1: Improving Access to Lifetime Income
        Our Country's voluntary retirement savings system has changed over
    time but continues to offer a robust and effective structure to support
    workers in retirement. Over the years, the workplace retirement system
    has largely shifted away from defined benefit (DB), or pension, plans
    that provide employees with a guaranteed stream of income for life, to
    a defined contribution (DC) plan structure, which allows employees to
    set aside a portion of their salaries to fund their retirement needs in
    tax-deferred accounts. To help increase savings, employers often make
    contributions on behalf of their employees. To put some numbers behind
    this shift, in 1975, private-sector DB plans had a total of 27.2
    million active participants, and private-sector DC plans had 11.2
    million active participants. \1\ In 2019, the most recent year for
    which there is data, private-sector DB plans had 12.6 million active
    participants, and private-sector DC plans had 85.5 million active
    participants.
    ---------------------------------------------------------------------------
        \1\  A Visual Depiction of the Shift from Defined Benefit (DB) to
    Defined Contribution (DC) Pension Plans in the Private Sector,
    congressional Research Service, December 27, 2021.

        Thus, the retirement system has generally shifted from one much
    more focused on income in retirement (DB plans) to one that is designed
    more to focus on accumulation of assets (DC plans). While there are
    benefits to each of these approaches, the shift in focus from
    guaranteed income to accumulation has inevitably had implications for
    individual retirement savers. The key implication is that investment
    risk has shifted from the employer (through managing a pension fund) to
    the individual saver. Americans now need to be much more thoughtful and
    proactive in how they plan to make the savings they have worked so hard
    to build last throughout their retirement, which in some cases could be
    30 or more years. This challenge becomes even more important when we
    consider that Americans face a projected $4 trillion retirement income
    gap, \2\ and more than 40 percent of households are forecast to exhaust
    their savings during their retirement years. \3\ If we fail to address
    this retirement income gap, not only will this shortfall have a severe
    impact on the quality of life in retirement, but it could also have a
    devastating impact on our economy.
    ---------------------------------------------------------------------------
        \2\  VanDerhei, Jack, EBRI Retirement Security Projection Model
    (RSPM)--Analyzing Policy and Design Proposals, EBRI, No. 451, May 31,
    2018.
        \3\  https://www.ebri.org/content/retirement-savings-shortfalls-
    evidence-from-ebri-s-2019-retirement-security-projection-model.

        Practical and readily achievable policy solutions could help
    address this retirement income gap and encourage innovative solutions
    focused on both increasing accumulations and providing improved access
    to guaranteed income solutions within the current DC retirement system.
    The SECURE Act included several important provisions aimed at improving
    access to annuities--the only products that can provide guaranteed
    income in retirement. Chief among these were the improvements to the
    annuity provider selection safe harbor, which boosted employer
    confidence in including annuities as retirement plan investment options
    by clarifying their obligations when selecting an insurance company to
    provide those guaranteed income solutions. There are, however, some
    additional steps that can be taken to further improve access to and
    utilization of annuities on retirement plan menus, including
    improvements to the rules governing what types of investments employers
    can default their employees into, to optimize retirement outcomes for
    American workers.
      Addressing the QDIA Rules to Increase Access to Guaranteed Lifetime
                                     Income
        Over 15 years ago, Congress passed the landmark Pension Protection
    Act (PPA) of 2006, which focused on leveraging automatic features such
    as automatic enrollment (to increase participation rates), automatic
    escalation (to increase savings rates), and automatic investment
    selection (to enhance default investment options for long-term
    retirement savings returns). The PPA required the Department of Labor
    (DOL) to establish rules for enhanced default investment options that
    became what are now known as qualified default investment alternatives
    (QDIAs).

        The DOL's QDIA rules provide employers a safe harbor to default
    their employees into certain investment vehicles. Among the
    requirements that must be met to comply with the QDIA rules is that
    employees be able to access to their investments ``not less frequently
    than once within any three-month period.'' DOL's QDIA rules established
    this requirement for periodic liquidity, which has effectively limited
    the types of investments plan sponsors choose as QDIAs. Specifically,
    this liquidity requirement has created a barrier for inclusion of
    certain annuities--including those that would be most beneficial to
    retirement investors and retirees--that have liquidity limitations that
    do not meet the QDIA requirements.

        Annuities have been shown to significantly improve outcomes for
    retirees and are increasingly being recognized by plan sponsors as an
    important plan feature. According to our research, 38 percent of
    employers believe that the feature most lacking in their plans is
    access to guaranteed lifetime income. \4\ The absence of guaranteed
    lifetime income is problematic, as 35 percent of plan sponsors say the
    primary purpose of retirement plans is to provide employees secure
    income in their retirement years (versus 20 percent who say they are a
    vehicle to help employees save/accumulate and 45 percent who say both
    have equal importance). \5\ Further, multiple studies across our
    industry have consistently found that 70-85 percent of employees think
    guaranteed income is the most important component of a quality
    retirement program. In one survey, 78 percent of employees said they
    would move some or all money from their plans to guaranteed income
    options if given the appropriate opportunity. \6\ Despite the wide
    recognition of the importance of guaranteed lifetime income, plan
    sponsors are discouraged from including the most effective lifetime
    income options, such as fixed annuities with delayed liquidity
    features, as part of a default investment because of the current QDIA
    regulations.
    ---------------------------------------------------------------------------
        \4\  TIAA 2022 Retirement Insights Report.
        \5\  TIAA 2022 Retirement Insights Report.
        \6\  2021 Retirement Confidence Survey, EBRI.

        The DOL's QDIA rules have, however, had a positive impact to the
    extent that more savers who do not play an active role in managing
    their retirement investments (the majority of savers) have invested in
    more diversified and risk-appropriate portfolios. This has been
    accomplished through the use of target-date funds (TDFs)--diversified
    investment vehicles that meet the QDIA liquidity requirements. TDFs
    handle a range of investment decisions many savers simply would not
    otherwise make or feel they have the expertise to make (e.g.,
    establishing the appropriate mix of stocks and bonds, value and growth
    stocks, international and domestic investments). As a result, TDFs have
    become the QDIA of choice--76 percent of DC plan sponsors elect to use
    the QDIA safe harbor default their participants into a TDF. \7\
    ---------------------------------------------------------------------------
        \7\  PLANSPONSOR 2020 DC Plan Benchmarking report.

        However, because of the limitations of the QDIA regulations,
    current TDFs have not been able to innovate to address the range of
    risks that savers face during their 30 or more working and saving
    years, and then during their potentially 30 or more years in retirement
    (e.g., market risk, longevity risk, inflation risk, interest rate risk,
    and cognitive risk). Guaranteed lifetime income options can help
    address these risks and make TDFs a more comprehensive retirement
    security solution, addressing both the need to accumulate assets and
    the need to ensure those assets last throughout retirement. It is
    particularly noteworthy that, according to one study, 64 percent of
    participants already assume that their TDF will provide guaranteed
    income in retirement. \8\
    ---------------------------------------------------------------------------
        \8\  Investor Testing of Target Date Retirement Fund (TDF)
    Comprehension and Communication, submitted by Siegel & Gale LLC to the
    U.S. Securities and Exchange Commission. February 2012.
    ---------------------------------------------------------------------------
            The Lifetime Income for Employees Act Offers a Solution
        The QDIA rules have had a powerful shaping effect on the retirement
    market but have unfortunately not evolved with the changing retirement
    landscape to enable plan sponsors and retirement investors to avail
    themselves of the best available options. It is time to modernize the
    QDIA rules to expand the choices plan sponsors have when designing
    default investments so they can provide retirement investors with a
    solution that both helps them accumulate savings and ensures those
    savings will be guaranteed to last them the rest of their lives.

        Accordingly, TIAA strongly supports the Lifetime Income for
    Employees Act (H.R. 6746). This bipartisan legislative proposal,
    introduced by House Education and Labor Committee members Rep. Don
    Norcross (D-NJ) and Rep. Tim Walberg (R-MI), would amend the DOL's QDIA
    regulations to allow a default investment to include a guaranteed
    lifetime income component with liquidity features that do not meet the
    current regulations as part of a broader QDIA investment. Under the
    proposed legislation, participants would receive multiple notices to
    ensure they understand the liquidity features and would have additional
    time--180 days--to opt out of the investment should they wish to do so.
    It is also important to emphasize that, despite the liquidity features
    of any already invested dollars that individual investors may have been
    defaulted into by their plan sponsors, investors would always retain
    the ability at any point in time to direct future investments into any
    investment choice on a plan menu.

        From TIAA's perspective, there are several benefits to having an
    annuity component that has limited liquidity in a QDIA. First, it
    provides for higher returns than a liquid version because the
    contributions can be invested for the long-term, like a DB or pension
    plan. This long-term investment translates, in most cases, to a 10
    percent-15 percent increase in the participant's balance in the annuity
    at the time of retirement. Another way a sponsor can view the limited
    liquidity guaranteed contract is as if a DB plan is sitting on a DC
    plan chassis: contributions made to the annuity grow over time with
    less leakage or a reallocation of investments to options that are not
    in the best interest of a participant. Finally, based on our
    experience, participants do not typically seek to withdraw
    contributions to annuities. The withdrawal rate on TIAA's liquid
    annuities has remained well under 5 percent since 2008, including
    during volatile market cycles, improving investment outcomes as savers
    remain invested and avoid harmful market timing.

        Finally, this legislation would not mandate that default
    investments include a guaranteed lifetime income component with delayed
    liquidity features. The Lifetime Income for Employees Act would only
    expand the options available to plan sponsors, guided by their
    fiduciary duty, in their selection of an appropriate QDIA for their
    employees. For plan sponsors looking to reestablish the guaranteed
    income features that were a hallmark of DB pensions, this proposed
    change would give them a much-needed tool to help them do just that for
    their workers.
        Recommendation #2: Increasing Access to Retirement Savings Plans
        For individuals to have access to retirement savings and lifetime
    income, they must first have access to a retirement savings plan.
    According to the Bureau of Labor Statistics (BLS), one-third of private
    industry workers did not have access to employer-provided retirement
    plans in March 2021. Almost 50 percent had access only to DC plans.
    Additionally, BLS found that 52 percent of those working for a company
    with fewer than 50 employees did not have access to a retirement plan.
    \9\ In a similar study, only 54 percent of families headed by prime-age
    workers (age 32-61) participate in any kind of retirement plan, down
    from 60 percent in 2001. \10\ According to the Center for Retirement
    Research, millions of Americans are not offered, or are not
    participating in, tax-advantaged savings and investment options through
    their employer. In fact, only 54 percent of white workers participate
    in a retirement plan, and the numbers drop to 46 percent for Black
    Americans and 34 percent for Latino Americans. In most cases, people
    without access to employer plans work for small businesses, which can
    further exacerbate the racial and gender gaps in retirement access.
    ---------------------------------------------------------------------------
        \9\  TED: The Economics Daily, 67 percent of private industry
    workers had access to retirement plans in 2020, BLS, March 1, 2021.
        \10\  Monique Morrissey, The State of American Retirement Savings--
    How the shift to 401(k)'s has increased gaps in retirement preparedness
    based on income, race, ethnicity, education, and marital status,
    Economic Policy Institute, December 2019.

        One of the biggest deterrents to small businesses adopting
    retirement plans has been the cost of starting and maintaining the
    plan, as well as handling its ongoing administration. According to a
    Pew Research Center study, employers that do not offer a retirement
    plan pointed to the financial cost and organizational resources needed
    to start a plan as barriers. \11\ Another study indicated that 50
    percent of employers stated that cost was the primary reason for not
    starting a plan. \12\ Therefore, reducing the administrative burden for
    employers would remove a significant barrier preventing employers from
    starting a retirement plan. We appreciate the Committee looking at ways
    to help plan sponsors ease their retirement plan administration
    burdens, especially for smaller plan sponsors that may not have a
    benefits office or that have a single employee responsible for all
    human resource functions.
    ---------------------------------------------------------------------------
        \11\  PEW Research Center, Employer Barriers to and Motivations for
    Offering Retirement Benefits--Insights from Pew's International survey
    of small businesses, June 21, 2017.
        \12\  16th Transamerica Retirement Survey, 2015.
    ---------------------------------------------------------------------------
              403(b) Multiple Employer Plans/Pooled Employer Plans
        The SECURE Act took steps to address these concerns by removing
    some regulatory barriers that would make it easier for employers--
    especially small employers--to overcome these deterrents by leveraging
    economies of scale and joining together under a single retirement plan.
    This concept, known as multiple employer plans (MEPs) or pooled
    employer plans (PEPs), has been and will continue to be instrumental in
    helping people working for smaller employers save in an employer-
    sponsored retirement plan. Prior to enactment of SECURE, in a survey of
    small employers, 66 percent said they would be likely to consider a
    MEP. \13\ Unfortunately, 403(b) plans were inadvertently left out of
    the MEP and PEP changes included in the SECURE Act. The Securing a
    Strong Retirement Act and RISE Act in the House, as well as the
    Improving Access to Retirement Savings Act--a Senate bill co-sponsored
    by Senator Maggie Hassan (D-NH) along with Senators Chuck Grassley (R-
    IA) and James Lankford (R-OK)--would allow for 403(b) plans to be
    offered as PEPs.
    ---------------------------------------------------------------------------
        \13\  Empower Institute, Open MEPs: A Promising Way to Narrow the
    Coverage Gap, December 2018.

        We welcome this change because, at TIAA, we have seen the benefits
    that a similar arrangement can provide to plan sponsors and their
    employees. We have been encouraged by how some of our 403(b) clients
    have been able to leverage the existing rules to come together using a
    ``common bond'' to improve upon their existing retirement plans. Given
    the financial struggles that some smaller institutions we serve are
    facing in the wake of the pandemic (e.g., decreased student enrollment,
    staff reduction), being able to join a single plan has allowed them to
    provide a more robust retirement plan than would have been possible on
    their own. They have reduced their administrative burdens and lowered
    costs while expanding plan services to their employees (e.g., expert
    investment selection). One of the most notable examples of this success
    is how a group of private colleges recently came together to offer
    their employees across numerous institutions a better selection of
    investment options and more guidance on retirement planning.
    Implementation of the provisions being considered today would not only
    increase access to retirement plans for employees but also allow our
    clients to have improved opportunities to band together to leverage
    economies of scale and access services that they would not be able to
    do as a single plan.
                     Expanding Long-Term Part-Time Coverage
        Another helpful proposal, which is in Chair Murray's Women's
    Retirement Protection Act, would further expand access to plans for
    part-time employees. I want to commend Chair Murray for her tireless
    work to expand access for long-term part-time employees, employees who
    work more than 500 hours over three consecutive years, to their
    employer's plan. This provision was included in the SECURE Act, and the
    current proposal to accelerate access for long-term part-time employees
    after two rather than 3 years would be a sensible extension. This
    proposal has already been included in the bipartisan legislation being
    considered in the House this week.
         Addressing Unnecessary or Duplicative Disclosures and Notices
        As we look to expand participation and engagement in retirement
    savings plans, we should take a close look at how we communicate with
    current and prospective retirement savers. One potential solution is to
    examine the number and types of notices and disclosures sent to
    participants. We agree with the bipartisan proposals in the Securing a
    Strong Retirement Act, the Retirement Improvement and Savings
    Enhancement Act and the Retirement Security and Savings Act that would
    require the DOL, Treasury and Pension Benefit Guaranty Corporation
    (PBGC) to review the current Employee Retirement Income Security Act
    (ERISA) and Tax Code reporting and disclosure requirements and make
    recommendations to simplify, consolidate and standardize disclosures.
    Simplifying and streamlining required notices would reduce costs for
    current plan participants and reduce costs for new employers who are
    considering adopting a plan.

        Additionally, we also support the bipartisan proposals in the
    aforementioned bills that would lift requirements that DC plan sponsors
    continue to provide notices to unenrolled employees, other than an
    annual reminder notice of their eligibility to participate in the plan.
    Sending notices that do not apply to an employee not participating in
    the plan seems inefficient. Simplifying the notices workers receive and
    not having to send notices that do not apply to an employee who has not
    enrolled in the plan could have the added benefit of helping savers
    better understand those notices.
     Providing Incentives for Employers to Start a Retirement Savings Plan
        As stated earlier, cost is a barrier to an employer starting a
    retirement plan. Retirement proposals and policies that provide tax
    incentives, such as credits, to start a plan or incentives that help
    drive participation and increased savings could better help employees
    achieve retirement security.
             Recommendation #3: Enhancing Retirement Savings Rates
        Another important piece of strengthening our retirement security
    system is helping Americans save more. Many adults approaching
    retirement age may not be financially prepared to retire: 49 percent of
    adults ages 55 to 66 had no personal retirement savings in 2017. \14\
    About 50 percent of women ages 55 to 66 have no personal retirement
    savings, compared to 47 percent of men. Women also lag men at the other
    end of the savings spectrum: only 22 percent of women have $100,000 or
    more in personal retirement savings compared to 30 percent of men. \15\
    Additionally, a recent study found 1-in-4 Americans have no retirement
    savings at all, and those who are saving are not saving enough. The
    median retirement account balance for 55-to 64-year-olds in the study
    was $120,000. Divided over 20 years, that is $500 a month--hardly
    enough to support a comfortable retirement, even without factoring in
    lengthening life expectancies and rising healthcare costs. \16\ There
    are several ways this savings gap can be addressed.
    ---------------------------------------------------------------------------
        \14\  Brittany King, Those Who Married Once More Likely Than Others
    to Have Retirement Savings United States Census Bureau, January 13,
    2022.
        \15\  Ibid.
        \16\  https://www.pwc.com/us/en/industries/asset-wealth-management/
    library/retirement-in-america.html.
    ---------------------------------------------------------------------------
                               Emergency Savings
        One potential hurdle to employees saving for retirement is a
    concern about the need to access funds immediately to address short-
    term financial emergencies. Saving for unexpected expenses is
    challenging. A Federal Reserve Board study from May 2021 found that 35
    percent of Americans would have trouble handling an unexpected $400
    expense. \17\ Another survey indicated that 25 percent of Americans
    have no emergency savings and that more than 50 percent have less than
    3 months' worth of expenses covered in an emergency fund. \18\
    Individuals should ideally have at least 6 months of expenses saved in
    an emergency fund to prevent unexpected expenses from snowballing into
    greater financial hardships by relying on high-interest credit or
    retirement plan loans to cover a relatively small amount.
    ---------------------------------------------------------------------------
        \17\  Board of Governors of the Federal Reserve System, Report on
    the Economic Well-Being of U.S. Households in 2020 , May 2021 https://
    www.Federalreserve.gov/publications/2021-economic-well-being-of-us-
    households-in-2020-dealing-with-unexpected-expenses.html.
        \18\  Sarah Foster, Survey: More than half of Americans couldn't
    cover 3 months of expenses with an emergency fund, Bankrate, July 2021
    https://www.bankrate.com/banking/savings/emergency-savings-survey-july-
    2021/.

        TIAA works with our plan sponsors to prioritize holistic financial
    wellness, with budgeting for short-term needs as a starting point of
    educational advice. We also work with participants to educate them
    about the different options available to help them avoid unnecessarily
    tapping their retirement savings. During the pandemic, Congress acted
    swiftly to enact the CARES Act to provide flexibility to those in
    financial need. When participants reached out to TIAA to take a CARES
    Act withdrawal, we were often able to discuss with them the many
    different options other than a withdrawal from their plan to help them
    meet their immediate needs without adversely impacting their long-term
    ---------------------------------------------------------------------------
    retirement security.

        Generally, employers benefit from having numerous solutions
    available to enable them to customize how they want to help their
    employees save for emergency situations and simultaneously address
    their employees' need for retirement security. We commend the Committee
    for recognizing that emergency savings solutions can enhance retirement
    savings participation and rates. Providing employers with options to
    help them meet their employees' needs while helping minimize retirement
    plan leakage without mandating a one-size-fits-all approach is an
    appropriate way to explore solutions to the emergency savings gaps that
    many Americans face.
                          Improving the Saver's Credit
        Created more than 20 years ago, the little-known Federal Saver's
    Credit provides people with modest incomes a government match on their
    retirement contributions. The Transamerica Center for Retirement
    Studies (TCRS) polled more than 10,000 adults late last year and found
    only 48 percent were aware of the tax credit. Among those earning less
    than $50,000 annually, just 41 percent knew about the credit. Given
    that the Saver's Credit \19\ is limited and not refundable, lower-
    income workers who do not end up paying taxes cannot get the match.
    This valuable tool to promote savings for those who need it most could
    be further strengthened and publicized to help those in lower income
    brackets save more. Furthermore, a refundable Saver's Credit could be
    more beneficial to employees, especially younger employees. One study
    found that a refundable Saver's Credit would play a pivotal role in
    enhancing the assets of different types of savers at all points of
    their lives assuming the refundable credit could be deposited into the
    saver's retirement account. As an example, for a young saver, the
    refundable Saver's Credit could increase their assets from $262,400 to
    $390,400. \20\ This would be a positive development for increasing
    savings for lower income individuals.
    ---------------------------------------------------------------------------
        \19\  Transamerica Center for Retirement Studies, Fewer Than Half
    of U.S. Workers Are Aware of a Tax Credit for Retirement Savers,
    February 2022.
        \20\  Anna Milstein and Angela Antonelli, How Universal Access and
    a Refundable Saver's Tax Credit Can Transform Retirement Savings,
    Georgetown University Center for Retirement Initiatives, August 2021.
    https://cri.georgetown.edu/how-universal-access-and-a-refundable-
    savers-tax-credit-can-transform-retirement-savings/ (Young saver
    assumptions--started their account at age 25 and earned an average
    salary ($35,000) at a small employer over a 40-year career.
    ---------------------------------------------------------------------------
           Encouraging Employer Match Based on Student Loan Payments
        Many younger workers are missing out on retirement savings
    opportunities because they are saddled with student loans, especially
    minorities. Black college graduates owe an average of $25,000 more in
    student loan debt than white college graduates. Four years after
    graduation, 48 percent of Black students owe an average of 12.5 percent
    more than they borrowed. Black student borrowers are the most likely to
    struggle financially due to student loan debt, with 29 percent making
    monthly payments of $350 or more. \21\ While many of these individuals
    are aware of the importance of saving for retirement, they are forced
    to prioritize student loan repayments over longer term financial goals.
    Unfortunately, by responsibly paying their most urgent debt, such
    individuals lose the benefits of compound interest that are important
    when saving for retirement in the early years of their career.
    Bipartisan House and Senate bills would allow employers to match
    employees' student loan payments with retirement-plan contributions so
    workers could keep paying down their student loan debt without
    foregoing their employers' contributions to their workplace savings
    plans. Employers, in turn, would benefit from a tax deduction for their
    contributions to the same extent they would for matching employees'
    retirement plan contributions while also creating goodwill and a
    compelling recruiting tool.
    ---------------------------------------------------------------------------
        \21\  Hanson, Melanie. ``Student Loan Debt by Race''
    EducationData.org, March 10, 2022, https://educationdata.org/student-
    loan-debt-by-race.
    ---------------------------------------------------------------------------
                       Expanding Automatic Plan Features
        Automatic plan features help ensure many savers do not miss out on
    the first step to retirement savings. Auto-enrollment first gets
    employees into the plan and auto-escalation incrementally nudges them
    to save more over time. By harnessing the power of inertia, these two
    features are critical to helping workers save enough to retire with
    dignity. However, more needs to be done.

        According to the Defined Contribution Institutional Investment
    Association's (DCIIA) plan sponsor survey, auto-enrollment saw growth
    in adoption to 69 percent in 2019, up from 60 percent in 2016. \22\
    However, that means roughly 30 percent of plan sponsors still have not
    adopted auto-enrollment. When drilling deeper into auto-enrollment by
    plan size, PlanSponsor found that only 22 percent of plans with less
    than $5 million in assets had auto-enrollment, and of those with less
    than $50 million, only 47 percent had auto-enrollment features. \23\
    When asked, plan sponsors identified cost as one of the barriers to
    including an auto-enrollment feature in their plans. \24\
    ---------------------------------------------------------------------------
        \22\  Defined Contribution Institutional Investment Association
    (DCIIA) Plan Sponsor Survey, April 2020.
        \23\  PlanSponsor, 2021 DC Plan Benchmarking Survey, November 2021.
        \24\  Defined Contribution Institutional Investment Association
    (DCIIA) Plan Sponsor Survey, April 2020.

        The auto-escalation feature also saw a rise in adoption by plan
    sponsors, where 69 percent of plans offer auto-escalation in 2019, up
    from 50 percent in 2016. \25\ However, similar to auto-enrollment, the
    numbers vary when looking at plan size. For plans with less than $5
    million, 65 percent are defaulting participants at 3 percent of their
    salary or less. For plans that are smaller than $50 million in size,
    the number decreases to roughly 50 percent defaulting participants at 3
    percent of salary or less. \26\ To the extent that workers need to
    contribute anywhere from 10 percent-15 percent annually of their
    salary, including both employee and employer contributions, to
    accumulate sufficient retirement savings, then it could take
    participants 7 years to start contributing to the point where they are
    saving enough.
    ---------------------------------------------------------------------------
        \25\  Defined Contribution Institutional Investment Association
    (DCIIA) Plan Sponsor Survey, April 2020.
        \26\  PlanSponsor, 2021 DC Plan Benchmarking Survey, November 2021.

        Proposals to improve upon and encourage adoption of these automatic
    feature provisions are included in bipartisan legislation. We encourage
    Congress to continue to pursue improvements in this area consider
    include automatic plan features enhancement in legislation you are
    drafting.
                             Supporting Caregivers
        To contribute to a workplace retirement plan you need to be
    working. For numerous reasons and for varying lengths of time,
    employees occasionally must step aside from their full-time job to
    focus on the needs of a parent, a child or a spouse as a full-time
    caregiver. To help those who need to leave the workforce for these
    reasons, the majority of whom are women, Congress should move ahead
    with bipartisan proposals like the Expanding Access to Retirement
    Savings for Caregivers Act. This legislation, introduced in the House
    last year, would help those who were forced to stop saving entirely
    while they were not employed to allow them to make special catch-up
    contributions to get their retirement savings back on track.
                                   Conclusion
        I commend you, Chair Murray and Ranking Member Burr, for holding
    this hearing today. It is another example of the bipartisan work being
    done to help ensure a brighter financial future for all Americans.
    Access to guaranteed lifetime income through a retirement plan is
    critical, and we believe enhancing access to the best versions of these
    products throughout the entire system is foundational. The HELP
    Committee can play a critical and much needed role to ensure the next
    round of retirement legislation will further build on that foundation
    and help plan sponsors use the power of default investments to help
    their workers obtain and maintain a guaranteed stream of retirement
    income that will last them for their entire lives.

        On behalf of the entire retirement industry, I would like to thank
    you for your commitment to improving and modernizing the current
    retirement system. And thank you for the opportunity to testify. I look
    forward to answering your questions.
                                     ______

                     [summary statement of doug chittenden]
        TIAA believes past retirement improvement efforts have been
    successful in helping many American workers. There is more that can and
    should be done to improve the retirement system in a meaningful and
    holistic way. This testimony will focus on three key policy goals that
    would help improve retirement security for all Americans.

        Expanding access to lifetime income solutions. TIAA strongly
    supports addressing regulatory barriers that currently exist that have
    effectively deterred the use of guaranteed lifetime income products in
    the default investments that employers use on their retirement plan
    menus. The Lifetime Income for Employees Act (H.R. 6746) is a
    bipartisan legislative proposal that would amend the DOL's QDIA
    regulations to allow a default investment to include a guaranteed
    lifetime income component with liquidity features that do not meet the
    current regulations as part of a broader QDIA investment. This is vital
    to addressing future lifetime income needs of retirement savers and
    help them attain financial security in retirement.

        Increasing access to retirement savings plans. The SECURE Act took
    steps to improve access to multiple employer plans (MEPs) or pooled
    employer plans (PEPs), which make it easier for employers--especially
    small employers--to leverage economies of scale and join together under
    a single retirement plan. Unfortunately, 403(b) plans were
    inadvertently left out of the MEP and PEP changes included in the
    SECURE Act. Current proposals would allow for 403(b) plans to be
    offered as PEPs. Other steps that could be taken include improving
    access to plans for long-term part-time workers, simplifying plan
    disclosures and increasing incentives for starting plans.

        Enhancing retirement savings rates. Helping savers build emergency
    savings accounts can help address the need to tap retirement savings in
    for short-term unforeseen expenses. Improving access to and usage of
    the Federal Saver's Credit can help lower income individuals build a
    retirement nest egg. Allowing employers to make matching contributions
    to a retirement plan based on their employees' student loan payments
    can help younger workers get a jumpstart on saving for retirement.
    Expanding the use of automatic plan features (auto-enroll, auto-
    escalation) can help improve retirement plan participation. Policy
    makers should seek ways to help those who leave the workforce to care
    for family members catch-up on missed savings opportunities.
                                     ______

        The Chair. Thank you very much. And thank you to all of our
    witnesses today. We will now begin a round of 5 minute
    questions. I again ask my colleagues to keep track of your
    clock and stay within those 5 minutes.
        Ms. Rademacher, the Aspen Institute recently found that 40
    percent of Americans reported they would struggle to afford a
    $400 unexpected emergency, and one in four families now say
    they have no emergency savings at all.
        We can improve financial resiliency by helping Americans
    save for those emergency expenses, and it would also, of
    course, bolster retirement security because people could tap
    designated emergency savings accounts rather than take from
    their retirement accounts and put their future financial
    security at risk. How can emergency savings accounts help keep
    one's retirement accounts intact?
        Ms. Rademacher. Thank you, Senator. It is a great question.
    And there has been a number of organizations really doing some
    deep research, listening and learning about the role of
    emergency savings in short and long term financial stability.
    We certainly know from, again from the Consumer Financial
    Protection Bureau, when they look at the drivers of financial
    well-being long term, liquid savings has the highest
    explanatory value of any other facet that they looked at in
    terms of that.
        It goes to consider that when we are talking about
    expanding access to retirement savings, and we want that
    experience to be successful for individuals, that the
    concurrent ability to save for emergencies and create that
    liquid savings is important.
        We recently published, ``Principles for Design of Emergency
    Savings,'' and one of the things that is important for this
    Committee is that there are a couple of examples now of within
    plan emergency savings. It is important for behavioral--in
    terms of behavioral psychology to have a specific bucket that
    is deemed for emergency savings that is separate than your
    retirement savings, but they can work together and then ERISA
    could provide guidance to do this kind of co-location of
    accounts, sidecar accounts, if you will.
        It is true that emergency savings needs of households is--
    that statistic you provided from the survey of Consumer
    Finances from the Federal Reserve is true about the lack of
    emergency savings.
        Also, as we look at post-pandemic and the experience we had
    looking at the CTC and the payments, as those have gone away,
    liquid savings becomes even more important and facilitating
    that savings automatically, like we do with retirement savings,
    there is a lot of research around the opportunity for that,
    both here in the U.S., but also in the U.K., where there is
    pilots underway to look at automatic enrollment into emergency
    savings within retirement plans.
        The Chair. Thank you very much. Mr. Koumantaros, an
    important piece of the retirement puzzle is making sure that
    those who have employer sponsored retirement accounts don't
    forget about them when they leave a job. According to the
    Bureau of Labor Statistics, the average person holds 12 to 13
    jobs in their career, nearly half of those jobs are held from
    the ages of 18 to 24.
        If someone started saving for retirement right after
    college, the savings from that individual's first employer
    sponsored retirement account would have grown tremendously by
    the time they retire because of compound interest, and it is
    important that they remember that those accounts exist.
        Senators Warren and Daines actually have a lost and found
    bill that would create a national registry to try to help
    reconnect Americans with their retirement accounts. Can you
    talk with us about how such a registry would be beneficial for
    both plan sponsors and participants?
        Mr. Koumantaros. Of course, Chair Murray. Thank you very
    much for that question. A national registry would absolutely
    help missing--the participants locate missing retirement plan
    accounts. And we would cheerfully embrace that type of an
    approach.
        We would recommend pairing this with an employer safe
    harbor as it related to missing participants where an employer
    following the specified procedure, would be able to
    automatically distribute retirement plan accounts into, say, an
    individual retirement account in the name of that participant
    and for that participants' benefit.
        Certainly the role of Government can help to facilitate
    participants accessing those missing accounts. That safe harbor
    would be an important relief for employers today because
    currently automatic IRA distributions are limited to accounts
    of $5,000 and below. However, a necessary condition for this to
    work is also to enhance the investments within automatic IRA
    rollover accounts.
        More specifically, today, it must be invested in a capital
    preservation investment option. We would suggest following a
    defined contribution plan participant directed rules around a
    qualified default investment alternative with respect to
    automatic rollover IRAs. The combination of all of that
    legislation will lead to much better outcomes for participants.
        The Chair. Okay, thank you very much.
        Senator Burr.
        Senator Burr. To all our witnesses, thank you for being
    here. Doug, TIAA seems to increasing--be increasingly involved
    in multiple employer plans. They follow the same funding rules
    as a single employer plan, but they allow employees to band
    together to tackle the job of administrating costs--
    administrating the plans and the costs. Can you talk about the
    potential of this type of plan designed to close the access in
    savings gap?
        Mr. Chittenden. Thank you, Ranking Member Burr. The ability
    for--as we have been discussing, one of the primary impediments
    that small employers face in offering retirement benefits to
    their employees is the costs of starting and maintaining a
    plan, in addition to managing it on an ongoing basis.
        The ability to band together and share those costs across
    employers is, we think, a tremendous benefit and an opportunity
    to increase participation. The rules that were made available
    through the SECURE Act were an important step forward. As my
    remarks indicated, we would like to see those rules expanded to
    include employers in the not for profit space. We have seen
    some tremendous benefits already for many of our clients.
        We have associations of small, independent colleges and now
    10 states that have come together and formed multi-employer
    plans, providing more access, better benefits, and lower costs
    to their employees by doing so. We think--so we think this
    structure offers a lot of promise and it is a great way to
    increase access to millions of Americans.
        Senator Burr. You are also supportive of action that we
    took for unrelated employers to pull together to offer a single
    retirement plan. But I understand that ensuring the provision
    captures 403(b) is important. Can you give us some examples of
    how recently enhanced law is helping clients and how an
    expansion of flexibility for 403(b) will help employers in
    teaching, medicine, and research?
        Mr. Chittenden. Yes. The rules that are--we are proposing
    would be expanded to include 403(b) plans that are currently
    available in the 401k space, provide a more flexible--provide
    for more flexible structures. Under the current rules that are
    available, the 403(b) plans in not for profit space, there
    needs to be sort of a common nexus or a common organizing group
    to bring the employers together.
        For our clients, this is typically an independent college
    association in this state or an association of independent
    schools or those types of organizations. If by liberalizing the
    rules that are applicable in the 401k world, that common nexus
    could be payroll providers, financial advisers, other entities
    that are able to share costs or bring together clients that
    they work with in a much more flexible and open way than we
    think would increase access.
        Senator Burr. Thank you. Ida, recognizing that the gig
    economy is here to stay, and we are not going to go back to a
    traditional employee, employer relationship, what can we do to
    help this universe save for retirement?
        Ms. Rademacher. Thank you, Senator. It is great question.
    We started Aspen thinking about all workers, no matter where
    they work and how they get paid, and how they are going to
    navigate increasingly complex financial life. And so the
    overall direction we need to head is that we need to find a way
    within a retirement savings system in this country for gig
    workers to be able to save as well for retirement. There are a
    couple of places to look at the moment.
        First, there is, at least in California, when some of the
    states are taking the lead on some of the retirement savings
    expansion work, some states have designed that so that all
    workers can save into those systems. And then, of course, this
    also gets to the key of the portability issue because many
    people who are working in the gig economy also have a W-2 form
    of work or are very fluid between these places.
        I do think there is incremental steps to take toward this
    piece. But of course, part of that is around the overall design
    right now of an employer based system and how to navigate that.
    I do think that the main next steps will be around thinking
    through the mechanics and the guidance for portability, and
    then thinking about how we can then leverage that new expansion
    to enable a conversation about gig workers as well.
        Senator Burr. Great. Thank you. Thank you, Madam Chair.
        The Chair. Senator Casey.
        Senator Casey. Chair Murray, thank you. And I thank you and
    the Ranking Member for this hearing and especially your work on
    these issues that surround retirement. I want to start with Ms.
    Rademacher, regarding a piece of legislation that I have. I
    wanted to start by noting the numbers here.
        The Bureau of Labor Statistics finds that nearly 24 million
    Americans are part time, part time workers. We know that many
    of these workers don't have access to workplace retirement
    plans due to their part time status. In fact, less than half,
    40 percent of these 24 million Americans have retirement plans
    through their employers. A much lower number than what we would
    hope.
        The SECURE Act took an important step forward by requiring
    companies to include these workers in employer sponsored
    retirement plans after 3 years, 3 years of employment. Senator
    Tim Scott and I are seeking to build upon this progress through
    our bill, the Improving Part Time Workers Access to Retirement
    Act.
        That is Senate bill 3751. This bill would require employers
    to expand retirement plan eligibility to part time workers
    after just 2 years, 2 years of employment, not three. So I
    wanted to ask you, how do you believe this legislation would
    improve part time workers' ability to both save and plan for
    their futures, particularly for lower income workers?
        Ms. Rademacher. Thank you again, Senator, for the question.
    We agree that the ability to increase the percentage of
    participants that are part time work in retirement savings is
    one of the best ways to take a next tier of progress toward an
    inclusive retirement savings system. To your point, 42 percent
    of part-time workers currently have access to a workplace
    retirement plan, compared to 81 percent of full time workers.
        By decreasing the amount of time that one would have to be
    employed with a specific employer that is going to do an
    important job in expanding who has access through the existing
    system. That is going to disproportionately help, again, women,
    people of color, and many others who choose especially and need
    especially after COVID to have flexibility and part time work
    as part of the work going forward.
        The other piece of this that opens up is, it goes to some
    of the ideas about automatic re-enrollment, which is that while
    41 percent have access right now and 81 percent have--full time
    workers do, it is a smaller percentage who actively
    participate. And there is very good reasons at any point in
    time when someone may choose not to be able to save. But to re-
    scoop into that within a cycle every three or 4 years means
    that people have an ongoing opportunity to reconsider that
    option and is another way that the combination of expanding
    options for part-time workers would go further.
        Senator Casey. Thank you very much. My last questions for
    Ms. Hounsell. I want to thank you for your testimony before the
    Special Committee on Aging in January. And while bipartisan
    legislation like SECURE expanded retirement access for many
    workers, significant disparities still remain.
        These disparities are especially significant for women, as
    you have noted, who often spend time out of the paid workforce
    to serve as family caregivers, as well for communities of
    color, workers in communities of color who face systemic
    barriers to building wealth and savings. Ms. Hounsell, what
    types of retirement policies would help address these
    disparities, specifically for women and people of color?
        The Chair. Thank you, Senator, for your question. I think
    that it is difficult because caregivers, especially and so many
    other women that are working in those trying to balance their
    family lives, have very little control over their hours. And so
    what happens is the eligibility rules, I think, just keep them
    out.
        I mean, it keeps them out because of the hours, a long time
    ago, I was working with a group of retail workers out in West
    Virginia, and I had never heard about this, that so many of
    them who are part time workers would just get sent home. They
    drive in, they get there, and then they get sent home.
        They never got those hours that are required. And I think
    that is what really, that is what really stops people. So
    unless we had an auto IRA or some great plan that everybody
    could jump on, I think that is what is required.
        Senator Casey. Thank you. Thank you, Senator Murray.
        The Chair. Thank you.
        Senator Smith.
        Senator Smith. Thank you, Chair Murray and Ranking Member
    Burr. I really appreciate this hearing, and I appreciate the
    bipartisan focus on retirement security. I think it is
    important to note that we know that the typical Black and Brown
    family has significantly less wealth than a typical white
    family, and this is very true for Native families as well. And
    it is also true that retirement and pension policy is really
    complicated.
        It is complicated for policymakers. It is complicated for
    people who should be benefiting from these retirement products.
    And the details matter, right, because they can have a huge
    impact on a person's financial security and our efforts to
    address wealth inequality in our Country.
        Ms. Hounsell, I would like to bring up with you a very
    specific example of what this looks like for tribal members
    living on tribal land. So for many years, tribal courts have
    successfully handled family law cases, including native
    families, adjudicating difficult questions around custody and
    alimony and more.
        These tribal courts are often the first choice for tribal
    members who have the choice of resolving their disputes, either
    in tribal court or in state court, but they choose tribal
    court. But so here is the specific problem.
        Under current Federal law, orders from those tribal courts
    about how to allocate retirement plan assets in a divorce
    aren't recognized. Only state court decisions are recognized.
    And so what this means is that in many cases, a Native family
    needs to go to state court for relief.
        Native women, in most cases, would need to go to state
    court for relief instead of the tribal court where they reside.
    Or what often happens is that one party simply isn't able to
    access the resources that they are due from their former
    spouse's retirement plans. And more often, of course than not,
    that is a woman who is left much worse off.
        This seems like an unfair limitation on the courts of these
    sovereign tribal nations, and it hurts Native families. So Ms.
    Hounsell, can you just tell me what you think about this issue
    and how you see this issue?
        Ms. Hounsell. Well, I mean, I think QDROs--we could be here
    for hours talking about those issues. But what I remember from
    our work in New Mexico was that there was no laws sort of
    linking the tribal court with the state. And so you had to
    decide like where you would have your divorce, which could be
    harmful in many ways.
        The Retirement Equity Act of 1984 was where QDROs were
    first instituted. And I think if we are waiting for the states
    one by one to be passing laws or doing something to fix this,
    then really, we need a legislative fix, a Federal legislative
    fix.
        Senator Smith. Well, thank you. I agree with you. I think
    that sort of doing a series of one off state by state
    resolution of this just ends up creating more complexity. It is
    something that is already really hard for people to understand
    to begin with, including this Senator sometimes. I think that
    makes it more complicated. So it sounds like you would agree
    that this is an important issue, that it would be good for
    Congress to take up and try to help resolve.
        Ms. Hounsell. Yes.
        Senator Smith. Right. Thank you. Thank you so much. Let me
    just also stay with you. We were just talking about how women
    that generally face a loss of significant amounts of family
    earnings and retirement security in the face of--when they are
    confronted with a divorce.
        A lot of times current law has loopholes that allow it, one
    spouse, to transfer or even hide retirement plan funds without
    the permission of the other spouse. This is one of the reasons
    I am happy, and I am so glad to be a co-sponsor of Senator
    Murray's Women's Pension Protection Act to help address this
    unfair transfer of wealth. Could you just comment on this
    legislation and why you think it is important?
        Ms. Hounsell. Yes. I am not really familiar with that
    provision, but I do know that there is--I think there is a GAO
    report that is going to look into all of those issues. And when
    you work with women, you get everyone has a story, and anyone
    who has gone through a divorce has a story. And so I think it
    is complicated in so many ways that we really have to make sure
    that we are taking a close look at what the solutions are for
    it.
        Senator Smith. Yes. Thank you so much. I think this is
    particularly a place we are being careful and thoughtful and
    diving into the details to make sure that these policies
    deliver the result that we all can probably agree on, both for
    Native women living in tribal land and also for some--Senator
    Murray's bill is a great example of that. Thank you very much,
    Madam Chair.
        The Chair. Thank you.
        Senator Rosen.
        Senator Rosen. Thank you, Chair Murray, for holding this
    bipartisan hearing. And to you and your staff for their work
    crafting bipartisan retirement legislation. Financial security
    for Americans and retirement should not be a partisan issue,
    and I really appreciate you bringing all of us together to
    discuss this today.
        Retirement plans that employees access through their
    employer, well they are so important to saving for retirement.
    Savings are automatically deducted from workers' paychecks,
    allowing them to benefit from tax free treatment of retirement
    savings without even thinking about it.
        That is what employer sponsored pension plans are designed
    to do. There are also optional plan design features that can
    make it even easier to build savings, such as automatic
    enrollment, where businesses can require employees to opt out,
    meaning that many more will essentially choose the default of
    opting in an automatic escalation where businesses offer their
    employees the choice of automatically increasing their
    retirement plan contributions periodically.
        But under current law, employers must pay out of pocket to
    add these optional plan design features. So for many small
    business owners who want to help their employees save more for
    retirement, the out of pocket cost of adding these features is
    too great a burden. So to address this, I am currently working
    on bipartisan legislation that would allow employers to add
    these features and have the fees for adding these optional
    design plan come from retirement plan assets, making it easier
    for small businesses to offer their workers high quality
    retirement plans.
        Mr. Koumantaros--I am sorry, I am probably not saying that
    right. But as an advisor to employer plan sponsors, can you
    give us your thoughts on why only a small number of businesses
    with fewer than 50 employees offer plan design features that
    help workers save for retirement, like auto enrollment, auto
    escalation, when the vast majority of companies with more than
    1,000 employees offer them?
        Mr. Koumantaros. Thank you, Senator, for that question. And
    you illustrated the issue here perfectly there in your remarks.
    There are challenges that small employers face with respect to
    administrative costs of plans and the complexity of plans.
    Those are the greatest barriers to new plant adoption. But even
    for those employers that adopt plans, those issues still
    persist in operation of the plan.
        There is also some issues with respect to small businesses
    engaging with their consultants, with respect to consultative
    services, that would provide for beneficial features in these
    plans, like auto enrollment and auto escalation. Those
    discretionary features today, under current law, would need to
    be paid by the employer. They cannot be treated as a planned
    expense.
        Unfortunately, many small employers simply don't have these
    conversations with their consultants. The legislative solution
    that you proposed is precisely what we need to help encourage
    these types of conversations that provide these more beneficial
    features to the small employer market segment as well.
        Senator Rosen. Well, thank you. We hope to be introducing
    that soon. But what other recommendations might you have for me
    to incentivize all businesses to offer workers competitive
    retirement plans, financial education, like you just mentioned,
    and other benefits?
        Mr. Koumantaros. Thank you, Senator. We would love to see
    considerably more expansion of worksite financial planning, and
    of course, expansion of retirement plan benefits, particularly
    in the smaller employer segment where the coverage gap is so
    pervasive. So to that end, any type of financial incentives
    that can encourage these types of plans in the form of tax
    deduction certainly and with respect to worksite financial
    planning very specifically.
        Today, any such benefits that are provided by an employer,
    while it could be deductible to the employer, would constitute
    a taxable benefit to the workers, despite the fact that
    worksite financial planning has yielded tremendous results. So
    to the extent that we could make this a nontaxable benefit to
    workers and to the extent that it could be a deductible benefit
    for employers, those incentives would provide meaningful
    results.
        Senator Rosen. Well, thank you. 99 percent of businesses in
    Nevada are small businesses, so this has a real impact on my
    state, if we are able to do that. I would like to continue on
    with you for the little time I have left.
        I appreciate your testimony and disparities in retirement
    savings, and this crisis is particularly acute in communities
    of color and impacts States like Nevada, where diversity is our
    strength. Millions of Americans, hundreds of thousands of
    Nevadans 65 and older have income below the poverty threshold,
    and Black and Hispanic seniors are even more likely to fall
    into poverty as they age.
        Ms. Hounsell, as an example, you cite statistics showing
    that Hispanic and Black women are twice as likely to age into
    poverty than white women. So I want to pick up on what Senator
    Casey asked about disparities, Ms. Hounsell. So tell us more
    why women and people of color are more likely to have lower
    savings, retirement, and how you think we here in Congress can
    address it?

        [Technical problems.]

        The Chair. You need your mic on.
        Ms. Hounsell. The coverage and the access issues, I think
    are just different. If you don't work in a place where there is
    a retirement plan and you work for a small business, often you
    just don't have access. And so even if you want to save in some
    way, how do you do that? And people always say to me, well,
    anyone can go into an institution and open up an IRA.
        But what do we have, like 11 percent, I think, that
    actually do that, and people are often doing that just with
    rollovers, not with new opening up with a new plan. So I think
    that is the problem for not just--it is for low wage workers
    generally that there isn't a way to save. I mean we are doing
    these little projects where we see people are so grateful that
    there is some way that they can sign up with the credit union
    where there is some small account to start an emergency
    savings.
        We need that. I mean, I remember the auto IRA from 20 years
    ago in a way that if employers could do that and there were
    incentives, it would just make a big difference.
        Senator Rosen. Thank you. Thank you, Madam Chair.
        The Chair. Thank you.
        Senator Hickenlooper.
        Senator Hickenlooper. Great. Thank you, Madam Chair, and
    thank each of you. We have been watching on TV as we go between
    different hearings, but it is something that really is of
    crucial importance. Now, according to the Federal Reserve, 75
    percent of the bottom half of income distribution, the three-
    quarters of those people in the bottom half don't have a
    retirement plan at work.
        But more concerning, according to the Federal Reserve,
    those in the bottom 50 percent by wealth have a median
    retirement savings of zero. And I think obviously, we need some
    more innovation in our retirement savings options so that
    middle Americans can participate and build wealth.
        Ms. Rademacher, I was going to ask you, since I have a long
    history with the Aspen Institute, could a retirement savings
    plan that has low costs and a Federal match, and easy to
    understand investments, could that work for this, that spectrum
    of workers?
        Ms. Rademacher. Absolutely, thank you for the question,
    Senator. The retirement savings system we have in America is,
    and as I said in my early remarks, when you look at the Survey
    of Consumer Finances in America, the two places that 80 percent
    of Americans have wealth on their balance sheets are home
    equity and retirement savings. And that is when we have a
    system that I like to say has one hand tied behind our back
    because we actually aren't engaged with over 50 million
    Americans having an opportunity to save in that system.
        Americans want the opportunity to save for their future.
    They need help in a couple of different ways. We need to remove
    the friction from that process as much as possible, which to
    the points that we have said is making automatic enrollment.
    They are making it available to any worker, no matter the size
    of the employer, or even in the long run moving this to figure
    out how we work with gig workers.
        People will save, an incentive, and understanding too, and
    this is a different jurisdiction than the HELP Committee, but
    there are differentiated ways that individuals are incentivized
    to save, right. If you are in a lower tax bracket, you get less
    of a--you get less of an opportunity to save on the dollar,
    right, than if you are in a higher tax bracket. There is lots
    of different ways that we can make this easier.
        We have seen in places where states are leading, we have
    seen in other countries, that when you have a system that is
    all in, people not only save, they take pride in that, and they
    take pride in the idea that their workers are able to save.
        I think this is a solvable problem. I think it is a problem
    that we can solve on a bipartisan basis in this country. And I
    think financial security at the household level is a critical
    piece of long term economic growth in this country.
        Senator Hickenlooper. Here, here. Mr. Koumantaros, and we
    have heard about how many small business workers have access to
    a retirement plan. And it is roughly half or maybe a little
    over half. And I know as someone who spent at least up until I
    was 50 and got the harebrained scheme that I would run in to--
    run for office. But I was in small business and really saw that
    the barriers that when you are running a small business, there
    are two, the plan and trying to deal with it.
        I have been working, our offices have been working with
    Senator Collins to figure out a way to remove administrative
    obstacles for small businesses. And you have seen the
    bipartisan SECURE Act group of plans and pooled employment
    plans provisions that will allow small businesses to pull
    resources, which at the same time will use economies of scale
    and be able to set up retirement plans at much lower cost.
        How can you--how can we balance the streamlining the
    compliance procedures while still making sure we have
    sufficient oversight?
        Mr. Koumantaros. Thank you, Senator. A very important
    question. As you touched upon, group of plans offer real
    promise for small employers, as do pooled employer plans. But
    there are important distinctions between the two. The Labor
    Department recently came out with guidance with respect to
    audit requirements as it related specifically around group of
    plans, and we are concerned that may create some issues for
    smaller employers. You see, small businesses today that sponsor
    a retirement plan that is smaller in size is not subject to an
    audit requirement.
        Accordingly, their administrative costs are a bit lower.
    Now, if a small employer wishes to participate, or I should
    say, join a group, a plan which provides certain administrative
    efficiencies, a consolidated trust, same set of investments,
    single Form 5500 filing, and an audit were required on the
    entire group, then obviously that small employer would bear a
    portion of those costs.
        Our suggestion would be to free the group from any audit
    requirement. But any larger employer that otherwise would be
    subject to an audit on its own, should have an audit apply for
    that larger employer that is part of a group of plans. The
    other piece of this, though, is to ensure that the Form 5500
    filing that would be required for the group should not be held
    up merely because an audit for one of those larger employers is
    incomplete.
        Together, that combination would make a group plan still a
    very viable option for small employers in the future.
        Senator Hickenlooper. Great. Perfect. And I have other
    longer questions which I will submit in writing, but at this
    point, I will return back to the Chair. I yield back my time.
        The Chair. Thank you very much. I see Senator Braun is
    here. I will give him a minute to sit in his chair. Senator
    Braun, if you are prepared to go next.
        Senator Braun. Thank you, Madam Chair. I have been
    listening with a lot of attention on this issue. For small
    businesses, finding the proper vehicle for offering employees
    retirement, of course, is a big issue. I think it has been well
    covered so far. The biggest issue I hear--and I was one of them
    as an employer because my company had 15 employees for a long,
    long time before it was large enough to where we can afford the
    overhead of providing any type of retirement to our employees.
    And of course, to do that, of course, the larger you get, the
    easier that is to do.
        But I want to take a different track and get your opinion
    on what I hear all the time that would be a prelude to actually
    the question of retirement. In Indiana, in most states, I think
    it is 16 million jobs across the country, are in need of middle
    skilled jobs. In other words, in my own company and across the
    State of Indiana, the largest manufacturing state per capita,
    we struggle with what you need to get before you actually have
    the consideration of a retirement plan, employees.
        They are coming from our educational system that in many
    cases stigmatizes the pathway for what most businesses are
    looking, and that is a better high school education, and then
    if you need to polish life skills and what you learn in high
    school, which we did 40 years ago all the time through a
    curriculum that was more geared to that.
        Currently 529 savings plans, and I hope you are all
    familiar with that, but it enables taking funding to all the
    areas that the marketplace is currently not having a problem
    with, two and 4 year degrees. In our own state, we ship out
    more 4 year degrees than we use within it.
        Senator Klobuchar and I have a bill called the Freedom to
    Invest in Tomorrow's Workforce Act that would simply say with
    that tool, give it to businesses to train kids in those skill
    sets. That is the No. 1 issue when I am traveling in Indiana is
    workforce.
        You got to have a workforce for those high demand, high
    wage jobs before you are ever going to get into the further
    discussion of what you do with retirement. I would love to hear
    your opinion. Each one of you on whether that makes sense
    simply to take 529 savings and make it available for
    certificates in workforce training along with everything else
    it does. We can start with Mr. Chittenden down here and move
    across and tell me what you think.
        Mr. Chittenden. Thank you, Senator. And I, we totally read,
    the 529 plan structure has proven to be a benefit to millions
    of Americans, allowing them to save for college or junior
    college and even other advanced degrees.
        I think the idea of being able to expand utilization of
    those benefits for other types of education, whether it is
    offered through your employer and other places, makes a lot of
    sense because at the end of the day, that is what it is about,
    helping employees, helping Americans get ready to fulfill their
    careers and support their families. So on the face of it, it
    seems like a good idea.
        Ms. Hounsell. I am not so familiar with that, so I think I
    will pass. That sounded good to me. But other than getting
    myself stuck into something that I really don't know I have an
    opinion on, I will pass.
        Ms. Rademacher. Thank you, Senator. It is a great question.
    And I think that there is--you are raising an important issue.
    At Aspen, we talk not just about the functions of wealth in a
    household's life, but the conditions for building wealth. And
    there is a set of preconditions that a household has some level
    of routinely positive cash-flow, just like a small business
    needs that, right, for its health and vitality.
        Beyond that, households need investible sums. They need a
    way to amass those. And 529 and retirement savings are some of
    the most successful vehicles we see for how households help
    with that. One of the other functions of wealth, though, that
    we talk about is how it gives households choice and agency and
    dignity around their own path and their own way of creating
    legacy for their families.
        The idea of expanding the usage of 529s to give households
    broader choice around what are the kinds of skills they need to
    build for the jobs they see today, I think respects households.
    I also think that there is probably a lot of important research
    to go into that too before coming up with the definitive
    recommendation.
        But there are, I know, even at the state level, a few state
    treasurers that are looking at ideas like that as part of
    making 529s a more widely useful tool for households and for
    the economy.
        Senator Braun. Thank you.
        Mr. Koumantaros. I would certainly echo the sentiments that
    we just heard, providing some increased flexibility and choice
    for families as it relates to their 529 plans and how those
    funds will be used, for what purpose, and expanding educational
    programs that would qualify. Certainly seems on the surface of
    it, a very reasonable and prudent proposal.
        Senator Braun. Well, thank you. And I think the fact that
    half of the kids that pursue a 4-year degree, end up not making
    it to the finish line. A third of them that do, do not have a
    marketable degree. And of course, we need that.
        But almost all the jobs that are begging are in that
    category or needing a more polished high school education and
    access to certificates to get into the highest demand, high
    wage jobs that are out there ready to go. Hopefully, the
    Committee will take a look at that down the road, this bill
    that Senator Klobuchar and I are sponsoring, and maybe be able
    to weave it into something. Thank you so much.
        The Chair. Thank you. Senator Burr, do you have any final
    comments? I have a few more questions. Ms. Hounsell, I wanted
    to talk to you a minute. We have heard a lot about ways to help
    Americans save for retirement through defined contribution
    plans. I want to briefly shift to defined benefit plans, where
    benefits are based on the years of service, and where employers
    may offer employees ready for retirement, a lump sum amount. Or
    a lump sum payout for their pensions.
        A GAO report found companies were offering lump sum buyouts
    without key information people needed to make informed
    decisions. What sort of risks do lump sum buyouts posed to
    participants and how can proper notice and disclosures help
    them make informed decisions?
        Ms. Hounsell. I guess what I would say that the best that I
    have seen was when I was part of the ERISA Advisory Council 7
    years ago and the de-risking people came in and spoke to us so
    that we could write a report about what would be the best
    opportunities for people.
        It takes real counseling for people to understand all of a
    sudden that they are getting this huge lump sum and what that
    means. And we know that there is a recent study out from the
    MetLife that they have repeated from, I can't remember, the pot
    of gold I guess is what it is called, and shows that people
    spend their lump sum within 5 years. It is gone.
        It is often referred to, excuse me, like the lottery
    winners that all spend the money and they don't realize that it
    is going to be gone. So I think there needs to be real
    counseling and education. That seems to--what works best, and
    to find out what disclosures people need to know about.
        Like, people will think that the plan offers a certain
    benefit and then they find out that a doesn't. I think it is a
    big issue.
        The Chair. Yes, the law governing retirement or risk
    requires that notices and disclosures be understood by the
    average plan participant. And GAO separately found that nearly
    40 percent of 401k plan participants do not fully understand
    the fees they pay on their retirement accounts, which--and many
    of them aren't even aware they pay a fee at all. So maybe I can
    ask you, what can Congress do to improve transparency, so we
    increase retirement security and help people across the country
    really make the best financial decision for their family?
        Ms. Hounsell. I don't know, could you re-ask that, please?
        The Chair. What can we--what should Congress do to improve
    transparency?
        Ms. Hounsell. Well, I think there needs to be better
    disclosure is what it is so that people know exactly what they
    are getting and what it means and so that it is not a surprise
    because that is what--I have heard so many people who come and
    say my husband just got this huge lump sum, we thought it would
    be the best thing for us, and I think we made a big mistake,
    and we didn't know this or this, or we didn't know that there
    were certain benefits that we would have been able to get for a
    spouse. So I think that is the key thing, is letting people
    know and requiring that the information is there because you
    have asked for it.
        The Chair. Okay. Mr. Chittenden, you mentioned in your
    opening statement the need to offer lifetime--lifetime income
    solutions for retirees during the spin down phase of their
    retirement. I really support innovative solutions to help
    Americans plan their golden years so their retirement savings
    last as long as they are needed.
        This is an important topic, both for the individual saver
    and for the economy, and I want to make sure that we approach
    this issue from all angles. So in addition to making enrollment
    into lifetime income investment products, the default for
    employees, what other steps can we do to help retirees with
    their future income needs?
        Mr. Chittenden. Thank you, Senator. Clearly that is a--most
    Americans don't realize that their 401k plan or their defined
    contribution plan does not include a provision to provide a
    lifetime income in their retirement. So I think it is
    absolutely essential to continue to make that education.
        One of our clients, Yale University, 3 years ago, they made
    the decision to include lifetime income payments or lifetime
    annuities as part of their default option. By making that
    decision, they have increased the projected retirement income
    for each of their employees on average $6,000 a year.
        That is not just the professors, that is the maintenance
    staff, and the clerical staff, and the support workers across
    the board. That is the power of having the lifetime income
    options as part of the default option.
        Really changing the conversation from, what is my basket of
    money, how much is my accumulation, to what do I really have in
    terms of lifetime retirement income? That is the key.
        The Chair. Okay, thank you very much. And I want to thank
    all of our witnesses today and all of our colleagues who are
    here for their very thoughtful questions. I want to thank Mr.
    Koumantaros, Ms. Rademacher, Ms. Hounsell, and Mr. Chittenden.
        Thank you all for coming and sharing your advice and
    expertise today. I am actually very excited to roll out what I
    have been working on with Senator Burr soon, which addresses a
    lot of the issues that were talked about today, and I believe
    our discussion here will help us strengthen all of the bills
    that we are putting together.
        I just want to note that I especially appreciate the
    discussion about the need to add lifetime income into defined
    contribution plans so people can be sure their retirement
    assets will last. And I hope we can include ideas that achieve
    the right balance here in our legislation.
        For any Senators who wish to ask additional questions,
    questions for the record will be due in 10 business days, April
    12th at 5 p.m. The Committee will meet next Tuesday, April 5th,
    for a hearing on reauthorizing Food and Drug Administration
    user fees. Committee stands adjourned.
        [Whereupon, at 11:26 a.m., the hearing was adjourned.]

                                     [all]