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Bill Beefing Up Retirement Protections for Women Introduced

Two U.S. Senators (including Sen. Patty Murray (D-WA), Ranking Member of the Senate Health, Education, Labor, and Pensions Committee) have introduced legislation to address some of the challenges families face as they plan for retirement – particularly for women.

The Women’s Pension Protection Act of 2018 (WPPA) – co-sponsored by Sen. Maria Cantwell (D-WA) – would, according to a press release, “strengthen consumer protections to safeguard retirement savings, improve access to retirement savings plans for long-term, part-time workers, help increase women’s financial literacy, and give support to low-income women and survivors of domestic abuse seeking the retirement benefits they are entitled to following a divorce.”

Specifically, with regard to retirement plans, the bill would:

Expand existing spousal protections for defined benefit plans to defined contributions plans. It also explicitly outlines the rights of participants and beneficiaries to bring a civil suit for violations of these new requirements – rights which are currently available for participants and beneficiaries of defined benefit plans.

Change the minimum participation standards for long-term, part-time workers (most of whom are women). It would allow employees to participate in a plan once they have reached the current minimum participation standards (age 21 or the completion of one year of service – generally 1,000 hours of service during a 12-month period) or once they have completed at least 500 hours of service for two consecutive years, if earlier. This provision would not apply to employees who are covered by a collective bargaining agreement provided that retirement benefits were the subject of good faith bargaining. Oh, and the provision further provides that plans that fail to permit participation for these long-term, part-time workers may be subject to a civil penalty of $10,000 per year per employee;

Effective Dates

The increased spousal protections under defined contribution plans provision would become effective for distributions and rollover contributions six months following the enactment of the bill. The improved coverage for long-term part-time workers provision would apply to plan years beginning after Dec. 31, 2016. (The bill’s sponsors point out that any 12-month period beginning before Jan. 1, 2014 in which an employee worked at least 500 hours would not be counted for purposes of this provision.)

Other Provisions

The bill would also:

  • increase financial literacy by providing grants for community-based organizations to improve the financial literacy among women who are of working or retirement age; and

  • support low-income women and survivors of domestic abuse seeking retirement benefits by providing grants of at least $250,000 for community-based organizations that assist them in obtaining qualified domestic relations orders.

In addition to Sens. Murray and Cantwell, co-sponsors of the Women’s Pension Protection Act of 2018 include Elizabeth Warren (D-MA), Jeanne Shaheen (D-NH), Tammy Baldwin (D-WI), Heidi Heitkamp (D-ND), Mazie Hirono (D-HI), Debbie Stabenow (D-MI), Amy Klobuchar (D-MN), Maggie Hassan (D-NH), Catherine Cortez-Masto (D-NV), Tammy Duckworth (D-IL), Tina Smith (D-MN), Claire McCaskill (D-MO), Dianne Feinstein (D-CA), Kamala Harris (D-CA) and Kirsten Gillibrand (D-NY).