[Congressional Record Volume 165, Number 21 (Monday, February 4, 2019)]
[Senate]
[Pages S834-S835]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Ms. COLLINS (for herself and Ms. Hassan):
  S. 321. A bill to amend the Internal Revenue Code of 1986 to modify 
safe harbor requirements applicable to automatic contribution 
arrangements, and for other purposes; to the Committee on Finance.
  Ms. COLLINS. Mr. President, as chairman of the Senate Aging 
Committee, ensuring that more Americans are secure financially in their 
retirement years is one of my highest priorities.
  Later this week, our Aging Committee will hold a hearing on this very 
topic, following up on previous work we have done in the last Congress.
  Today, I rise to introduce two bipartisan bills that would help to 
promote greater retirement security. Together, these bills would 
encourage more small employers to offer retirement plans, provide 
incentives for employees to save more for their retirement, and make it 
easier for low- and middle-income taxpayers to claim an existing tax 
break for their retirement savings.
  According to the nonpartisan Center for Retirement Research, there is 
an estimated $7.7 trillion gap between the savings that American 
households need to maintain their standard of living in retirement and 
what they actually have saved. Think of that. We are not talking about 
billions here; we are talking about a $7.7 trillion gap.
  A recent Gallup poll found that only 54 percent of working Americans 
believe they will have enough money to live comfortably in their 
retirement years. We must, therefore, continue to work to ensure that 
more Americans will have sufficient resources that they need to enjoy 
what are supposed to be their golden years.
  There are many reasons why Americans have struggled to have 
sufficient funds for their retirement. One is the shift away from 
employer-based defined benefit plans, known as pensions, to defined 
contribution plans in which the risk is placed more on the employee. 
Another is the severity of the 2008 financial crisis. Yet another is 
rising healthcare costs, including the need for expensive long-term 
care. But the No. 1 factor is that Americans are living far longer than 
they did in the past. Many Americans are also reaching retirement age 
with more debt than retirees in past generations. Many Americans are 
worried that they will outlive their retirement savings.
  There is another contributing factor, and that is that employees of 
small businesses, which are the majority of businesses in this country, 
are much less likely to participate or even have access to employer-
based retirement plans. According to a study by the Pew Charitable 
Trusts, more than 30 million U.S. workers lack access to a work-based 
plan to save for retirement, so making it easier for small businesses 
to offer retirement plans would make a significant difference in the 
financial security for many Americans. That is why the first of the two 
retirement security bills that I am introducing today--the Retirement 
Security Act--would focus on reducing the cost and complexity of 
retirement plans, especially for our small businesses, and on 
encouraging individual employees to save more for their retirement.
  I am delighted that my friend and colleague from New Hampshire, 
Senator Hassan, has agreed to be the lead Democratic cosponsor on this 
bill. My colleague from New Hampshire has great compassion for those 
who are struggling to make ends meet. She and I both represent States 
with an aging population, and we know how difficult it is for many 
older Americans when they are struggling with high healthcare costs, 
heating their homes, affording their medications, and trying to get by 
in their retirement years.
  Our bill would make it easier for businesses to enter into multiple 
employer plans, known as MEPs, in order to offer retirement programs to 
their employees.
  MEPs permit small companies to share the administrative costs and 
burden of a retirement plan, and that helps to lower the costs overall. 
Current law discourages the use of MEPs, however, because it requires a 
connection, or a nexus, between unrelated businesses in order to join 
together as a MEP, such as membership in the same trade association. 
Our bill would waive that nexus requirement for businesses and would 
prevent employers from losing their tax benefits if one member of the 
MEP fails to meet the minimum requirements necessary to obtain these 
tax incentives.
  In addition, the bill would reduce the cost of maintaining a plan by 
directing the Department of Treasury to consolidate notices and other 
required documentation--in other words, to reduce all of the onerous 
paperwork.

[[Page S835]]

  The Retirement Security Act would also modify the existing safe 
harbor for automatic enrollment plans to allow employees to receive an 
employer match of contributions of up to 10 percent of their pay. 
Employees would be able to contribute more than 10 percent of their 
wages or salary, albeit without an employer match for contributions 
above 10 percent. This is an example of a provision that would 
encourage employees to save more for their retirement by giving them 
this tax incentive.
  I realize that businesses that choose to adopt this plan with the new 
optional safe harbor may face additional costs due to the increased 
employer match, and that is why our bill would also help the smallest 
businesses--those with fewer than 100 employees--to offset this cost by 
providing a new tax credit equal to the increased match.
  What we want to do in our bill is to provide incentives for employees 
to establish these plans by waiving the requirement that they have to 
be in a related industry, and we would also encourage both employees 
and employers to increase, if they can, the amount of money they are 
donating to these retirement plans.
  The new retirement plan options for businesses that are included in 
our bill are just that--they are options; they are opportunities. No 
business, large or small, would be required to offer its employees a 
retirement plan under our bill. This is an opportunity, not a mandate, 
but it is an opportunity that I would hope that more and more small 
businesses would consider because I know they share the concern about 
the financial security of their employees once they reach their 
retirement years.
  I am very pleased to see my colleague from New Hampshire on the 
Senate floor. I hope the Senate will listen carefully to her words as 
well.
  The PRESIDING OFFICER. The Senator from New Hampshire.
  Ms. HASSAN. Mr. President, I rise to join my colleague from Maine in 
discussing the Retirement Security Act.
  I first just want to start by thanking Senator Collins for her work 
on this bipartisan bill, the other bill she discussed, and for her 
leadership as chairman of the Aging Committee, to help ensure that 
older Americans can thrive. That includes, of course, making it easier 
to save for retirement.
  By the time they reach retirement, every hard-working American should 
have the peace of mind of knowing they can live comfortably and without 
having to worry about how to make ends meet. While Social Security is a 
critical safety net--one we have to protect for all--it was only 
designed, as Senator Collins pointed out, as part of the retirement 
equation.
  It is clear we are on the verge of a retirement crisis, as more and 
more Americans are retiring without the economic security they need. 
According to the Board of Governors of the Federal Reserve System, 
approximately 25 percent of working Americans have reported having no 
retirement savings or pension. AARP estimates that 55 million 
Americans--including roughly 230,000 Granite Staters--do not have 
access to a retirement plan at their workplace, and participation in 
retirement plans has dropped over the past several years.
  We know there is a significant gap between what people need in order 
to maintain their standard of living after retirement and what they 
actually have. It is essential we do more to help workers close that 
gap. That is why I am pleased to join with Senator Collins today in 
introducing the bipartisan Retirement Security Act.
  This commonsense legislation makes it easier for small businesses to 
provide retirement plans for their employees, something I hear from 
small business people all the time, something they want to do, but 
there are technical and financial challenges to doing it. This bill 
would encourage people in the workforce as well to save more for 
retirement, and it would help reduce the costs and complexities of 
maintaining a retirement plan.
  We have more work to do to help people in New Hampshire, in Maine, 
and all across our country plan and save for retirement, and the 
Retirement Savings Act is a strong step forward. I again thank Senator 
Collins for her leadership on this issue, and I look forward to 
continuing to work with her to pass the bipartisan legislation, as well 
as other shared priorities for retirees, small businesses, and more.
  Additionally, as a new member of the Finance Committee, I look 
forward to working with my colleagues to tackle this and other critical 
issues.
                                 ______