AARP Is Fighting to Protect State Flexibility on Retirement Plans

Innovative state solutions to America’s savings crisis are in danger. Federal overreach threatens an important Department of Labor rule that gives states flexibility to help workers save for retirement.

Fifty-five million workers in America have no way to save for retirement out of their regular paychecks. Their employers don’t offer a retirement plan because it can be costly and complicated to do so. The problem is especially severe among communities of color. Only 54 percent of African American and Asian American employees and 38 percent of Latino employees work for an employer who sponsors a retirement plan.

The result? The median retirement account balance for all working-age households is only $3,000. And almost 20 percent of people between the ages of 55 and 64 have no retirement savings.

States lead the way
States are the laboratories of democracy. Recognizing that employees are 15 times more likely to save for retirement if they have access to a workplace payroll deduction plan, several states have begun to forge a solution to this savings crisis.

California, Connecticut, Illinois, Maryland, Massachusetts, New Jersey, Oregon and Washington have all signed programs into law that remove regulatory and operational barriers to help small businesses that do not already provide a retirement savings plan to their employees to do so. These programs are called work and save programs or, sometimes, secure choice.

This is a popular idea. Again, according to the above-referenced survey, “Seventy-six percent (76%) or three in four political conservatives agree that elected officials should make it easier for small businesses to offer retirement plans to their employees, as do about four in five moderates (85%), and liberals (90%).”

DOL rule provides guidance to states
A 2016 Department of Labor rule on “Savings Arrangements Established by States for non-Governmental Employees” provides guidance to states on how to enter into these public-private partnerships.

The rule is clear: Any automatic IRA program established by the state must remove the operational burden of running a retirement plan from small-business owners. The business owner’s only interaction with the program is to facilitate payroll deductions for these savings plans — something they’re already doing.

Retirement security in danger
But a new resolution under the Congressional Review Act — H.J. Res. 66 — threatens to overturn the Department of Labor rule. And the House of Representatives could vote on it as soon as this week. As AARP’s Nancy LeaMond says in the Los Angeles Times, repeal of this rule would “have a significant chilling effect on states, sending the political message that state flexibility is not a priority.”

As the nation’s strongest voice for Americans age 50-plus, AARP is fighting to protect your retirement security. We are working tirelessly to urge members of Congress and the U.S. Senate to vote no on H.J. Res. 66. AARP’s grass roots are mobilized and visiting with members of Congress daily. Our message : States should maintain their flexibility to establish private retirement programs, free from federal overreach. Congress should vote no on H.J. Res. 66!

I will have much more to say on this important issue (and more!) on Twitter, so please follow me @RoamTheDomes for all the latest.

Elaine Ryan is the vice president of state advocacy and strategy integration (SASI) for AARP. She leads a team of dedicated legislative staff members who work with AARP state offices to advance advocacy with governors and state legislators, helping people 50-plus attain and maintain their health and financial security.



Search AARP Blogs

Related Posts
December 11, 2018 10:07 AM
In an election year filled with partisanship and political fights, it’s no surprise that many Americans feel that their voices aren’t being heard or that the issues that affect their lives aren’t being addressed. But, many outstanding elected officials work hard every day to make a positive difference for their constituents.  That’s why AARP recognizes state legislators, governors, and other elected officials – from both sides of the aisle – who have stepped up and worked together to write, support, and advance common-sense policies that help older Americans remain in their homes and communities and retire with confidence. AARP is proud to announce our fifth annual bipartisan class of Capitol Caregivers, who fought this year to increase support for family caregivers and their loved ones, along with our fourth annual bipartisan class of Super Savers, who championed policies that enhance retirement security.
December 05, 2018 01:06 PM
Caroline is a mother of two children and a preschool teacher who unexpectedly became a family caregiver for her father after he suffered a major stroke. Her father, Tom, now deceased, lost the use of his right side and his ability to speak. Multiple surgeries and rehabilitation treatments later, he was able to live at home with the help of nurses. But it was up to Caroline to provide daily care, such as overseeing appointments and handling certain nursing responsibilities, like managing his medications. “I became the person my father could rely on more than anyone in the world,” Caroline said. “I became his safe place and his best friend.” In communities across the country, family caregivers like Caroline are caring for older parents, spouses and other loved ones, helping them to remain at home – where they want to be. Their tasks are done out of love and commitment, but are not easy. That’s why AARP is fighting for family caregivers and their loved ones in every state. In 2018, AARP advanced new policies to provide more help at home, flexibility at work, training, relief and more, which will benefit over 30 million family caregivers. Here are a couple highlights:
November 27, 2018 08:55 AM
A few months ago, I wrote a blog about the vital role that transportation options play in what we at AARP call “livable communities” – great places to live for people of all ages. Being able to get around is critical to earn a living, raise a family, contribute and stay connected to your community and enjoy life. And, having alternatives to getting behind the wheel of your own car is particularly important for older adults who want to stay in their homes and communities as they age.