4 in 10 women expect the COVID-19 pandemic to have a long-term impact on their finances
The average woman loses over $400,000 over a forty-year career due to the wage gap, and some women of color lose over $1,000,000 due to pay inequality by retirement
(Washington, DC) – U.S. Senator Jeanne Shaheen (D-NH) joined U.S. Senator Patty Murray (D-WA) and Congresswoman Lauren Underwood (IL-14) to reintroduce the Women’s Retirement Protection Act of 2021 (WRPA), legislation to address the retirement gap and bolster women’s financial security. The reintroduction comes in light of the COVID-19 pandemic and economic crisis that have disproportionately impacted women, particularly women of color—with a recent survey finding that 40 percent of women said they expect the past year to have a long-term impact on their finances.
“The data doesn’t lie – the COVID-19 crisis had a devastating and disproportionate impact on women in the workforce. The pandemic compounded issues working women already experience, including the persistent wage gap and hardships that women endure from financial insecurity to divorce or even domestic violence. This requires a comprehensive response and swift action from Congress,” said Shaheen. “I’m glad to join this bicameral effort to do just that and be forward looking to protect women’s retirement security. Now more than ever, we must ensure women have the financial safeguards in place so they can take care of themselves and their families without worrying about their savings running out.”
Even before the COVID-19 pandemic, data has long shown women’s financial futures are undermined by other factors. According to the National Women’s Law Center, the average woman loses more than $400,000 over a forty-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. 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—as discussed in a 2020 report from the Government Accountability Office.
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 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.
- 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. The SECURE Act established retirement plan eligibility for such workers after three years with an employer—WRPA would reduce that to two years;
- 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.
In the Senate, the legislation is cosponsored by Senators Blumenthal (D-CT), Hirono (D-HI), Klobuchar (D-MN), Feinstein (D-CA), Smith (D-MN), Warren (D-MA), Cantwell (D-WA), Wyden (D-OR), Sanders (I-VT), Baldwin (D-WI), Bennet (D-CO), Menendez (D-NJ), Cortez Masto (D-NV), Kaine (D-VA), Padilla (D-CA), Rosen (D-NV), Brown (D-OH), Gillibrand (D-NY), Stabenow (D-MI), Durbin (D-IL), Merkley (D-OR), Duckworth (D-IL) and Booker (D-NJ).
In the House, WRPA is co-lead by Representatives Jan Schakowsky (D-IL), Suzanne Bonamici (D-OR), and Donald Norcross (D-NJ).
“Women, especially women with low incomes and women of color, were facing a retirement crisis even before the pandemic. 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," said Amy Matsui, Director of Income Security at the National Women’s Law Center.
“AARP is pleased to support the Women’s Retirement Protection Act which aims to improve women’s financial security. The bill would prevent a spouse from cashing out a retirement account without first getting the other spouse’s consent,” said AARP. “In addition, part-time workers would benefit from access to retirement plan coverage after two (rather than three) years of employment. This change will be especially helpful to the more than 27 million workers who work less than full-time, most of whom are women or caregivers.”
Full text of the Women’s Retirement Protection Act can be found HERE.