New legislation introduced by Sen. Patty Murray, D-Washington, is aimed at improving women’s retirement security.
The Women’s Pension Protection Act of 2015, according to the Senator’s office, would strengthen consumer protections to safeguard retirement savings, improve access to retirement savings plans for long-term, part-time workers, most of whom are women, and help increase women’s financial literacy.
One of the proposed protections in the legislation is a measure that would extend spousal protections currently available for defined benefit plans to defined contribution plans like a 401(k), to prevent such things as one spouse taking a loan or distribution from a 401(k) without the other spouse’s knowledge or consent.
The bill would also expand coverage of retirement plans to low-wage and part-time workers not currently eligible to participate, by amending the minimum participation standards for long-term part-time workers.
The new standards would require employers to allow employees to participate in a plan once they have reached the earlier of 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 three consecutive years.
The WPPA also contains provisions to increase financial literacy in two ways.
First, it would require financial providers to provide a link to the Consumer Financial Protection Bureau in any offer for the sale of a retirement financial product or service.
This link would provide information and resources regarding retirement planning and/or retirement security. Second, the WPPA would also provide for grants through the Department of Labor to established community-based organizations to improve the financial literacy of women who are of working or retirement age.
Murray, who is the ranking member of the Senate Health, Education, Labor, and Pensions (HELP) Committee, introduced the bill with cosponsors Senators Kirsten Gillibrand, D-New York, Claire McCaskill, D-Missouri; Jeanne Shaheen, D-New Hampshire; Barbara Mikulski, D-Maryland; Maria Cantwell, D-Washington; Tammy Baldwin, D-Wisconsin; Debbie Stabenow, D-Michigan; and Amy Klobuchar, D-Minnesota.
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