House Democrats Asked by IRI to Add Retirement Security to Affordability Agenda

On August 31, House Democratic Leader Hakeem Jeffries held a press conference on Capitol Hill on Democrats’ efforts to address affordability for American consumers.  

“We’re fighting to lower the high cost of groceries, gas and goods. We’re fighting to make healthcare affordable for every single American,” Jeffries said at the event.  

However, the Insured Retirement Institute sent Jeffries a letter on Tuesday, saying he failed to mention one key aspect of affordability: retirement security.  

“Affordability is not just an issue about what the family could afford today. It’s also about whether workers can save enough to retire, and also whether those who are retired … will have enough of a predictable guaranteed income,” says Paul Richman, chief government and public affairs officer at IRI.  

IRI’s letter points to laws enacted by Congress, like the Pension Protection Act, the Setting Every Community Up for Retirement Enhancement Act and the SECURE 2.0 Act as evidence of Congress showing a bipartisan focus on retirement-related issues..  

“Going back to 2019, when they did [the] SECURE [Act], and then in the next Congress they did SECURE 2.0. They’ve taken major historic steps with the comprehensive retirement security bills,” says Richman. “We haven’t seen one since SECURE 2.0, not for lack of trying on behalf of those who are advocating for it, but just that it got crowded out of the agenda.” 

The institute outlined four policy areas that House Democrats should be focusing on.

The first is expanding access to workplace retirement savings by passing the Automatic IRA Act, which would require private employers that do not sponsor a retirement plan to automatically enroll their workers in an automatic Individual Retirement Account or similar plan. It would establish rules for automatic contributions to those available plans. IRI also endorsed the Auto Re-Enrollment Act, to give plan sponsors a safe harbor every three years to automatically reenroll workers, who previously opted out of workplace retirement plans, into their company’s plan another chance. The group also backed the Helping Young Americans Save for Retirement Act, which would allow younger workers to begin participating in employer-sponsored retirement plans at age 18, down from 21 today.  

“It’s more of trying to figure out a way to continue to have retirement security … be part of the conversations that Congress is having about the challenges that Americans are facing every day,” says Richman. “The good thing about retirement security is that there’s always been sort of a recognition that there’s no Democratic way [or] no Republican way to strengthen retirement security. It’s something they agree needs to be strengthened.” 

As Richman highlighted, addressing retirement needs has generally remained a bipartisan issue in Congress. Currently however, it is Republicans who control the House and the Senate for the duration of the current Congress and who remain in control of the legislative agenda.   

Another key area, per the IRI, is making protected lifetime income widely available. The letter called for greater access to guaranteed lifetime income options in defined contribution plans, including changes to Qualified Default Investment Alternative rules to facilitate the integration of annuities into default investment options. The institute also supports expanding Qualified Longevity Annuity Contract eligibility to indexed and variable annuities that provide guaranteed benefits. 

As mentioned in its letter addressed to the Senate last week, the IRI also supported expanding investment options for 403(b) participants. The Retirement Fairness for Charities and Educational Institutions Act, according to IRI, should also be passed to allow 403(b) plans to invest using collective investment trusts and insurance company separate accounts, giving participants in those plans access to investment vehicles available to other DC plans. 

The IRI’s last request to Jeffries was to pass the Retirement Simplification and Clarity Act, which would permit workers age 50 or older to make in-service distributions to individual retirement annuities and simplify rollover disclosures. According to the letter, this bill would provide near-retirees with the option to convert their savings into retirement income while providing clarifying fiduciary safe harbors for employers that may feel uncertain about offering lifetime income solutions.  

Richman says the four areas were drawn from IRI’s broader 33 proposals for retirement policy. 

“These … focused mainly on … pillars of our agenda of expanding opportunities to save and facilitating the use of lifetime income solutions to provide greater and enhanced retirement security,” he says. “That’s why we focused on these four categories in the letter.”