Employer Plan Growth
Leaders in the retirement plan industry are optimistic that legislation and serious commitment on the part of employers will expand the availability of workplace retirement plans, according to “Hope for the Future: The Opportunity for Transformative Enhancement of Retirement Plans,” a new paper by Voya Financial.
“Despite expected headwinds of economic challenges and societal turmoil, experts strongly suggest that we may see significant progress made in retirement plans by 2030,” Voya says in the report. “Survey respondents believe this progress will be supported by a combination of factors, including technological advancements, legislative initiatives and greater employer commitment.”
The Georgetown University Center for Retirement Initiatives estimates that 57 million private-sector workers, or 46% of those who work in the private sector, are without access to a retirement plan through their employer. Georgetown says this is particularly true for employees at small businesses and among lower-income workers, younger workers, minorities and women.
To expand the availability of workplace retirement plans, different entities are taking different approaches:
| • | Twelve states now provide a state-run retirement plan; Oklahoma and New York state lawmakers are among the latest to introduce bills to create state-run retirement programs for employers lacking a retirement plan to offer to their workers. |
| • | Pooled employer plans (PEPs), made available this past January 1 through the Setting Every Community Up for Retirement Enhancement (SECURE) Act, show promise as an option for small employers. |
Additionally, two pieces of legislation that would expand retirement plan coverage are under discussion:
| • | Senators Susan Collins, R-Maine, and Mark Warner, D-Virginia, introduced the SIMPLE Plan Modernization Act to provide greater flexibility and access to small businesses and their employees seeking to use a SIMPLE [savings incentive match plan for employees] plan as a retirement savings option. |
| • | Senators Collins; Maggie Hassan, D-New Hampshire; James Lankford, R-Oklahoma; and Michael Bennet, D-Colorado, presented the Military Spouses Retirement Security Act, a bill that would help spouses of active-duty service members save for retirement, by increasing their access to employer-sponsored retirement plans. |