Amid the recent attacks on the 401(k) savings system, the key Senate committee with jurisdiction over ERISA plans to hold a hearing next week to examine what it describes as “confronting the retirement crisis facing working class Americans.”
The Senate Health, Education, Labor, and Pensions (HELP) Committee, chaired by Sen. Bernie Sanders (I-Vt.), will hold a hearing on Wednesday, Feb. 28 at 10:00 a.m. (ET).
“At a time when more than half of older Americans have no retirement savings and more than 50 percent of our nation’s seniors are trying to survive on an income of less than $30,000 a year, we must address the retirement crisis facing working class Americans,” Sen. Sanders said in a statement announcing the hearing.
While the announcement explains that the hearing will focus on what can be done to expand defined benefit plans for workers, the timing of the hearing is noteworthy. It comes amid a hot-button debate over the future of the 401(k) system that was ignited by a trio of academics who are proposing to limit contributions or accumulations in tax-advantaged retirement plans to address Social Security’s shortfall. It also comes as a controversial bill to establish a federal retirement plan for private-sector workers was reintroduced late last year.
To that end, Sen. Sanders observes that part of the issue of retirement insecurity stems from the decline in access to DB plans. The senator suggests, among other things, that a DB plan is typically 49% more cost effective than a DC account, and that limited access to workplace retirement plans has also contributed to retirement insecurity for many Americans.
That said, Sanders also points out that workers are 15 times more likely to save for retirement if they can do so via payroll deduction and 20 times more likely to save if access to a workplace retirement plan is automatic.
While the witness list has not yet been announced, the American Retirement Association plans to submit a statement for the record.
For those interested in tuning in, the hearing will be livestreamed on the Senate HELP Committee’s website.
