As his House subcommittee heard testimony on changes needed
to the U.S. retirement system, House Health, Employment, Pensions and Labor
Subcommittee Chairman Mark DeSaulnier, D-Calif., said Tuesday that Democrats
intend to introduce legislation that will combine several suggestions on how
best to tackle the problem.
“This draft bill makes a number of improvements to the
nation’s retirement system and includes important legislation that has been or
will be filed by our committee colleagues,” DeSaulnier said. He said that
subcommittee member Rep. Lucy McBath, D-Ga. will introduce legislation intended
to:
Help 401(k) participants better understand the fees they pay
on investments.
Increase lifetime options in workers’ f01(k) plans.
Expand workers’ ability to be part of their employer’s
retirement plan.
Boost employee ownership programs through the Labor
Department.
Encourage emergency savings.
Increase spousal protections in 401(k) plans.
He did not discuss details of those plans.
Spousal protection
Increased spousal protection in defined contribution plans
is essential, Amy Matsui, director of income security at the National Women’s
Law Center, told the subcommittee, in testimony..
“Because women face workplace inequities and shoulder the
burden of family caregiving, they experience disparities in retirement income
and retirement savings,” she said. “As a result, married women rely on their
spouses’ retirement income and savings more than men do”
She said that while has Congress established safeguards for
traditional defined benefit plans, the same is not true for defined
contribution plans.
“The limited spousal protections in DC plans means that
there is a significant risk that retirement funds upon which the spouse will be
relying for a secure retirement will be placed outside the spouse’s control –
and the spouse bears the full measure of that risk, with no recourse,” she told
the subcommittee.
ESG in retirement plans
Witnesses testifying Tuesday gave divergent views on the
role that environmental, social and governance (ESG) issues should play in
retirement plans.
“ESG risk analysis can be part of any prudent investment
analysis—and should not be called out for special, unique scrutiny, Aron
Szapiro, head of retirement studies and public policy at Morningstar said in
his testimony.
He said that ESG issues are increasingly seen as potentially
material to the performance of an investment, adding that as ESG data and
analytics have become available, asset managers have been able to obtain
greater insight into those issues.
In addition, Szapiro said, many participants want investment
options that align with their personal values, particularly many
sustainability-related issues. “Offering appealing investment options may
encourage people to save; Congress should enable plans to offer such options,”
he said.
Szapiro said, however, that some plans sponsors have shied
away from considering ESG analysis because of regulatory uncertainty
surrounding the issue.
Plan sponsors appear to have shied away from considering ESG
information and analysis, in part because of regulatory uncertainty, he added.
Andrew Biggs, senior fellow at the conservative American
Enterprise Institute, told the subcommittee that increased emphasis on ESG
issues is dangerous.
“I fear that current proposals to give ESG factors greater
emphasis in retirement planning could undermine Americans’ retirement savings
as a means to pursue public policy goals that are distinct from the retirement
system and the legal obligations currently placed on fiduciaries,” he said
Click here for the
original article.