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;
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.)
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).