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Will saving for retirement soon get simpler? Here's what Congress has planned

David Lightman, McClatchy Washington Bureau on

Published in Home and Consumer News

WASHINGTON — Saving for retirement — and understanding your benefits — could get a lot simpler soon.

Older people could contribute more to their retirement savings. Part-time workers could find it easier to build retirement accounts. Small businesses could get help offering employees retirement accounts.

Congress is moving in a deliberate, bipartisan fashion to craft legislation that would do all that and more.

The changes, which lawmakers aim to be in effect next year, “would have a range of positive impacts for workers across the country, some of which could be substantial,” said Katie Selenski, executive director of the CalSavers Retirement Savings Board.

In California, about 7.4 million private sector employees 25-64, or 61%, have not had access to an employer sponsored retirement plan, said a 2019 study by Nari Rhee, director of the Retirement Security Program at the University of California’s Center for Labor Research and Education.

Her research found that 54% of the state’s private sector employees did not have a retirement savings account or participate in a pension.

 

Rhee told The Sacramento Bee the House retirement reform legislation, which passed the House Ways and Means Committee on a voice vote last month, “tinkers around the edges of the retirement system and will thus have a modest impact on household retirement assets.”

The Senate is considering similar legislation with strong support from Democrats and Republicans.

All this is the latest installment of retirement reform that passed Congress easily in 2019, legislation that provided more incentives for employers to offer employees 401(k) plans and other options.

David Certner, AARP legislative counsel, noted that while the changes would be important, they tend to be incremental, so it’s not as though people will see sudden, dramatic changes in how they save for retirement or receive benefits.

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