ARA’s Turner-Joseph Urges House Panel to Expand Workplace Coverage

Testifying at a March 27 Capitol Hill hearing on behalf of the American Retirement Association, ASPPA member Martella A. Turner-Joseph encouraged members of Congress to enact comprehensive legislation to expand American workers’ access to workplace retirement plans.

Turner-Joseph, an enrolled actuary, founded Joseph & Turner Consulting Actuaries, LLC in New York, NY with her husband Eugene Joseph. She is a former member of ASPPA’s Leadership Council.

Noting that in the 13 years since Congress last enacted comprehensive retirement legislation – i.e., the Pension Protection Act of 2006 – the retirement marketplace has continued to innovate through new retirement-related products, financial wellness tools and decumulation strategies, but “public policy enhancements that could assist the innovations in the retirement arena have not kept pace,” Turner-Joseph told the hearing held by the House Small Business Committee.

“Despite the retirement industry’s best efforts, far too many Americans lack access to a retirement plan at work,” she said. “There are actions that Congress can and should take to address this lack of access. An excellent first step would be to make it easier and more meaningful for a small business to adopt a workplace retirement savings plan.”

Turner-Joseph voiced support for existing legislative proposals to enhance the incentives for and simplify the administration of workplace retirement plans – including proposals in the bipartisan Retirement Enhancement and Savings Act (RESA). She noted that these proposals include:

• increasing the incentives for small business owners to offer a qualified retirement plan by significantly increasing the tax credit available to small employers who offer a plan;
• adding a new credit to encourage plan designs that automatically enroll workers into plans with the ability to opt out;
• allowing business owners the proper time to decide whether to adopt a qualified retirement plan by extending the deadline up until the due date of their tax return; and
• giving plan sponsors increased flexibility to choose an administratively streamlined 401(k) safe harbor plan with generous employer contributions for rank-and-file workers.

“All these provisions are sorely needed because small businesses face real challenges when deciding to provide a retirement benefit,” she said. “These new policies will help these businesses make that critical decision with more certainty, clarity, and confidence.”

Turner-Joseph applauded RESA sponsor Rep. Richard Neal, the Chairman of the House Ways & Means Committee, “for his continued effort for more than a decade now to make the availability of workplace savings as widespread as possible. Chairman Neal’s Automatic IRA and Automatic Retirement Plan bills will close the retirement plan coverage gap to the greatest extent possible while imposing the minimum possible burden on employers. This approach leverages existing private sector solutions in the marketplace instead of replacing the entire system with a government-run program. These approaches deserve serious consideration and widespread support.”

Student Loans and Retirement Plan

Turner-Joseph also praised a legislative proposal that would aim to solve a vexing problem affecting Millennial workers: how to save for retirement while chipping away at their student loan debt. The proposal – included in Sen. Ron Wyden’s Retirement Parity for Student Loans Act and the Retirement Security and Savings Act introduced by Sens. Rob Portman and Ben Cardin in the last session of Congress – would allow employees to receive employer matching contributions into their 401(k) plan account based on the student loan payment amount. Student loan repayments would be treated as if the individual were contributing to their 401(k) plan, which would enable the individual to not miss out on the “free money” on the table that represents the employer matching contribution, Turner-Joseph said.

“I support a much-needed improvement to this legislative proposal that would allow this innovative plan design to be more attractive to small businesses, she said. “The proposal needs to clarify that student loan payments that are matched would be treated as elective deferrals for purposes of the [ADP] nondiscrimination test. Otherwise, the test would be significantly harder to pass, especially for small businesses, since the individuals with student loans would most likely be non-highly compensated employees (NHCEs) who would not have the resources to make elective deferrals.”

At the March 27 hearing, Turner-Joseph was joined by three other witnesses:

• Paul F. Davidson, Director of Product Management at Paychex;
• Greg Gorgone, CFO of Citizant, Inc., who testifyied on behalf of the U.S. Women’s Chamber of Commerce; and 
• Keith Hall, President and CEO of the National Association for the Self-Employed.

Click here for links to their written testimony, and here to view a video of the hearing on YouTube.