Today, the Senate Finance Committee held a markup of the Enhancing American Retirement Now (EARN) Act, which would improve the U.S. retirement system. The Committee approved the bill on a unanimous, 28-0 vote. Senator Sheldon Whitehouse (D-RI) delivered the following remarks at today’s Committee markup about his proposal to boost retirement savings for American workers:
“Nearly half of American workers have no personal retirement savings at all. Given workers’ stagnant wages in this country, that should come as no surprise. Wages have grown at a snail’s pace, while CEO pay and corporate profits grew leaps and bounds. It’s no surprise that half of Americans said in a recent survey that they couldn’t afford a $500 emergency medical expense, let alone save in a retirement account.
“This legislation offers some modest measures to help more people save, but ultimately, we should reform what is an upside-down system that benefits the wealthy more than hard-working Americans.
“It leaves out, unfortunately, Chairman Neal and Ranking Member Brady’s commonsense, bipartisan auto-enrollment provision. Even those with access to a retirement plan through their employer often struggle to build a nest egg that can maintain their standard of living in retirement. Auto-enrollment would be a big boost in participation.
“Auto-enrollment would increase participation in 401(k) plans by 80%, and increase contributions by 50%. It especially boosts participation among low-wage workers, and can nearly eliminate the racial gap in participation rates. Despite all of those values, only 1/3 of employers currently offer auto-enrollment.
“So, I have legislation to require all employers to offer auto-enrollment. The bipartisan provision advanced by our House colleagues, which I will offer and withdraw as an amendment, would take an important step in that direction.
“I am disappointed also that the package doesn’t include the Brown-Portman proposal to raise the outdated Supplemental Security Income asset limits. That change would remove the biggest barrier to saving for the nearly 8 million elderly and disabled Americans—including over 31,000 Rhode Islanders—with very low-incomes and limited resources who currently receive SSI.
“I would urge that these provisions be included in the final legislation. The auto-enrollment expansion was voted unanimously out of the House Ways and Means Committee and cleared the House 414 to 5. It’s a priority for AARP, and has found support at the American Enterprise Institute. It is clearly broadly supported. I look forward to continuing to work with Chairman Wyden and Ranking Member Crapo to ensure that these important measures are included in the final bill.”
Senator Whitehouse filed an amendment at today’s markup that aims to help America’s seniors prepare for financial security during retirement. Whitehouse’s amendment would require companies that adopt new 401(k) plans to auto-enroll their employees at a 3% contribution level and automatically increase that by a percentage point each year up to a maximum of 10%, unless the employee opts out. This bipartisan measure was included in the House’s Securing a Strong Retirement Act of 2021, which passed the House in March on a 414 to 5 vote.
Whitehouse’s amendment is based on his Automatic IRA Act, which is a common-sense solution to expand Americans’ retirement savings. The legislation would require employers who do not provide another qualified retirement plan and who have more than 10 employees to enroll workers automatically in an automatic Individual Retirement Account (IRA) unless the employee opts out.
At the markup, Chairman Wyden expressed his full support for the amendment and committed to working with Whitehouse to include the auto-enrollment amendment in the final legislative package.
Video of the Senator’s remarks can be found here.
Rich Davidson, 202-228-6291 (Press Office)
