Women are at greater risk of economic insecurity in retirement than men. The poverty rate for women 65 and older is nearly double that of men. This is due, in part, to women’s employment and family patterns [PDF], which reduce their lifetime earnings and limit retirement savings and future retirement income. In general, women earn less than their male counterparts, spend fewer years in the workforce, and are more likely to work part-time. Some of these work patterns are due to family responsibilities, including parenting and caring for sick, elderly, or disabled family members. Because women earn less than men and spend less time in the workforce than men, women reach retirement with fewer pension benefits [PDF] and retirement savings (as well as lower Social Security benefits) But because women live longer, on average, than men, they often must make those smaller retirement savings stretch over a longer lifespan. So increasing women’s retirement savings is a critical component of ensuring women’s retirement security.
Today, a group of female Senators took a significant step toward achieving this important goal. The Women’s Pension Protection Act of 2015 was introduced in the U.S. Senate by Senator Patty Murray, and co-sponsored by Senators Baldwin, Cantwell, Feinstein, Gillibrand, Klobuchar, McCaskill, Mikulski, Shaheen, and Stabenow (and hopefully will be joined by others, as well as by male colleagues, soon). The bill would enhance women’s ability to save for retirement in a number of critical ways:
- The Act would improve the rights of spouses to marital retirement savings in employer-sponsored retirement savings plans like 401(k)s. Retirement savings earned during a marriage may constitute one of the couple’s largest marital assets, and female spouses rely more on a spouse’s savings than men. But when married workers leave their jobs, they can unilaterally decide to spend their 401(k) funds or roll them over into an individually owned and controlled Individual Retirement Accounts (IRAs). The Act would strengthen spousal rights over 401(k) account balances by requiring a spouse to consent to funds being distributed at retirement or when the employee spouse changes jobs. The Act would also protect spousal rights to 401(k)-type assets that are rolled into an IRA.
- The Act would give more part-time workers the ability to save for retirement at work by requiring employers to make long-term part-time employees eligible to participate in defined contribution plans (like 401(k)s).
- Finally, the Act would provide women with information and advice to make the critical financial and investment decisions that will impact their retirement security.
The National Women’s Law Center applauds these Senators for recognizing the barriers to saving that women face at work and throughout their lives, and taking steps to increase their retirement security.