The American Retirement Association (ARA) submitted a statement to the Senate Special Committee on Aging in connection with its Sept. 24 hearing, “Women and Retirement: Unique Challenges and Opportunities to Pave a Brighter Future.”
“Women face a series of interconnected issues that make them distinctly more vulnerable to slip into poverty during retirement. The first challenge is the gender pay gap,” writes the ARA, continuing, “The gender pay gap squeezes the ability of women to save for their retirement. In other words, women earn less so they save less for their retirement.”
Challenges Women Face
The ARA outlined challenges women face. “Another concern is women who have student loan debt,” they write, which “puts women even further behind their male counterparts in saving for retirement.”
Furthermore, the ARA says, “The retirement saving challenges for women are not limited to rank and file workers, but impact women business owners as well. Women own more businesses and influence the retirement savings behavior of more employees than ever before.” In addition, the ARA points out, “Women live longer. When entering retirement, women, whom in many cases will have less money saved because of lower pay, student loan debt, and caregiving career interruptions, need to make that money last longer than men.” And the effect of that, the ARA suggests, is heightened since at the same time, “more women are forced into retirement early due to health concerns than men.”
ARA Support for Closing the Gaps
“Closing the retirement plan coverage gaps in that workforce so more women have the access and the opportunity to save through a workplace-based retirement plan is critical,” the ARA says. The letter notes that the ARA strongly supported the Setting Every Community up for Retirement Enhancement (SECURE) Act, which includes a provision requiring long-term, part-time workers, “many or perhaps most of whom are women, to be made eligible to participate in a 401(k) plan.” It adds that the ARA also has supported proposals requiring businesses over a certain size to offer a retirement plan.
“In addition,” the ARA writes, “enhancing and reforming the Saver’s Credit into a government matching contribution would help low- and moderate-income workers, many or perhaps most of whom are women, build their retirement nest egg.”
The ARA also supports the bipartisan Retirement Parity for Student Loans Act that would permit sponsors of defined contribution plans to make matching employer contributions into the plan for employees as these employees make their student loan payments. And it supports the provisions in the Women’s Retirement Protection Act that create two grant programs in the Women’s Bureau of the Department of Labor to help women build retirement savings.
“More needs to be done to address these special challenges that women face in their retirement years,” says the letter, adding that “the ARA appreciates the Senate Special Committee on Aging’s focus on this important issue and asks Congress for prompt action on these legislative items so women can be better prepared and more economically secure in retirement.”
Women in Retirement Council
The ARA worked with the leadership of the Women in Retirement Council (WIRC) in developing the letter. On Women’s Equality Day, the American Retirement Association announced the creation of WIRC to provide stewardship and support of women’s issues within the organization. Long a proponent of, and advocate for, women’s voices in the retirement plan industry, the ARA—the nation’s leading education, advocacy and information source for retirement plan professionals—officially formed a council drawn from across its five member associations to help bring focus to the current and future efforts to support and retain women in the retirement plan industry.
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