Democratic Lawmakers Reintroduce Women’s Retirement Protection Act

U.S. Senator Patty Murray, a Democrat from Washington who is the current chair of the Senate Health, Education, Labor, and Pensions (HELP) Committee, and Representative Lauren Underwood, D-Illinois, have reintroduced the Women’s Retirement Protection Act of 2021 (WRPA).

According to the lawmakers, the legislation aims to address the gender-based retirement savings gap and bolster women’s financial security overall. They say the reintroduction comes in light of the COVID-19 pandemic and the related economic crisis that has disproportionately impacted women, particularly women of color.

“COVID-19 has upended the finances of families across the country and led to severe job loss, especially in sectors like child care that disproportionately employ women, particularly women of color,” Murray says. “Even before this pandemic, women in America typically had less money saved for retirement, in part because they were paid less than their male counterparts for the same work throughout their careers. Inequities, like investments, compound over time—which is why it is so critical we take action now to address how this pandemic and other challenges are undermining women’s financial futures.”

Underwood echoes these warnings, noting that even before the COVID-19 pandemic, data has long shown women’s financial futures are undermined by various factors. She and Murray cite data from the National Women’s Law Center, showing the average woman loses more than $400,000 over a 40-year career due to pay inequality, requiring women to work for almost a decade longer than their male counterparts to make up the gender wage gap. The same research shows women are also more likely to be part-time workers—which can limit their access to employer-sponsored retirement plans. They may also be prevented from securing the retirement resources they are entitled to following a divorce due to barriers like complex rules and legal fees.

Responding to these issues, the WRPA includes a set of solutions that work to close the retirement gap by addressing some of the challenges that disproportionately affect women as they plan for their financial futures. The legislation, according to its sponsors, would strengthen consumer protections to safeguard retirement savings, increase eligibility for employer-sponsored retirement savings plans for part-time workers, increase access to information about retirement and savings tools, and help women with low incomes and survivors of domestic abuse get the retirement benefits they are entitled to following a divorce.

Among other goals, the WRPA would pursue the following:

• Strengthen consumer protections to safeguard retirement savings by expanding existing spousal protections for defined benefit plans to defined contributions plans to prevent one spouse from making decisions that might undermine a couple’s retirement resources without the other’s knowledge and consent.
• Ensure more part-time workers are offered retirement savings plans by expanding the minimum participation standards for part-time workers—most of whom are women.
• Increase access to information about retirement and savings tools by providing grants for community-based organizations to help provide information and financial tools to women who are of working or retirement age.
• Support women with low incomes and survivors of domestic abuse seeking retirement benefits by providing grants for community-based organizations that assist them in obtaining qualified domestic relations orders, the legal instruments that allow for the division of retirement benefits—assuring they receive the retirement benefits they are entitled to following a divorce or legal separation.

The bill enjoys more than a dozen co-sponsors it the Senate, and a handful of co-sponsors in the House—all of them Democrats.

Upon its reintroduction, the WRPA immediately received endorsements from the National Women’s Law Center, the Pension Rights Center and AARP.

“Women, especially women with low incomes and women of color, were facing a retirement crisis even before the pandemic,” says Amy Matsui, director of income security at the National Women’s Law Center. “Without swift and targeted action, women will feel the impact of the past year and a half of economic devastation for the rest of their lives. The Women’s Retirement Protection Act will take meaningful steps to safeguard and protect women’s retirement security.”

Karen Friedman, executive director of the Pension Rights Center, says the bill would effectively expand savings options for part-time workers, provide help for women in obtaining a share of their former spouse’s retirement benefits at divorce, and improve spousal rights in 401(k) plans.

Full text of the Women’s Retirement Protection Act can be found here.