Wednesday | June 15, 2022

Senators Scott, Brown Introduce Bill to Increase Retirement Security

WASHINGTON – Today, U.S. Senators Tim Scott (R-S.C.) and Sherrod Brown (D-Ohio) introduced the Advancing Auto-Portability Act of 2022, a bill that would allow a worker’s 401(k) savings account to be automatically rolled over from a previous employer to a new employer. The legislation would cut red tape to help Americans who change jobs frequently to increase retirement savings.

“For too many Americans, the security of retirement savings after a lifetime of hard work is too far out of reach,” said Senator Tim Scott. “Making it easier for workers to build savings will alleviate stress for families and ensure every person has the opportunity to retire with dignity, regardless of their income or economic status. I encourage my colleagues to join me in supporting this bipartisan, common sense legislation that will create a more secure financial future for countless Americans.”

“Ohio workers shouldn’t have to jump through hoops in order to save for retirement when they switch jobs,” said Senator Brown. “When work has dignity, people have peace of mind that they’ll have a secure retirement. This is a simple solution that allows Ohio workers to change jobs and take their retirement savings with them.”

Click here to read the bill. See below for statements of support.

“The sooner we can make auto portability the standard for all small, terminated accounts, the better it will be for workers, plan sponsors, service providers and, collectively, the country. So, let’s all help to make it happen.”  ? Alison Borland, EVP of Alight Solutions

“The American Benefits Council commends Senators Tim Scott and Sherrod Brown on the introduction of auto?portability legislation.  As the workforce becomes increasingly more mobile, auto?portability is important for enabling workers who change jobs to receive the benefits to which they are entitled. Auto?portability preserves retirement savings by providing automated solutions to improve defined contribution plan portability,” said James A. Klein, president, American Benefits Council.  “The legislation is voluntary and offers modest economic incentives to employers who include it in their plan design. The legislation helps workers consolidate small accounts attributable to a prior employer’s individual account plan, improve overall asset allocation, eliminate unnecessary fees, and reduce leakage of retirement savings from the tax?deferred retirement saving system.”  ? Jim Klein, President, American Benefits Council

“As stewards of the private retirement system, we have a responsibility to help improve retirement outcomes for America’s increasingly mobile workforce.  The auto portability legislation introduced by Senators Brown and Scott will help deliver significant benefits to under?served and under?saved workers, including minorities, women and low?income earners – many whom are disproportionately affected by cash?out leakage – by automating the movement of an individual’s 401(k) account from one employer to the next.” ? Kevin Barry, President, Fidelity Workplace Investing Fidelity Investments

“As we stated in January of this year, it is the NAACP’s fundamental belief that holistic economic inclusion is crucial to achieving racial equity. An inclusive economy is one where everyone can contribute and earn with fair access to resources and opportunities, while also building generational wealth.  Auto?Portability is a much needed and transformational tool to reduce cash?outs and enhance retirement savings. Although Auto?Portability alone will not address the racial wealth gap, it has the ability to positively support the ability of Black workers to build retirement security by creating a streamlined approach to saving.

“As the oldest civil rights organization committed to racial equity, the NAACP applauds Senator Sherrod Brown (D?OH) and Senator Tim Scott (R?SC) on the introduction of legislation that will make a meaningful difference to Black people and other people of color as auto?portability makes it easier to save for retirement and reduce the racial wealth gap.” ? Derrick Johnson, President NAACP

“The National Urban League (NUL) believes all sectors of our economy benefit from auto portability as it strengthens the defined contribution leg of America’s “three?legged stool.” Particularly, auto portability stems cash outs of 401k accounts, thus bringing enhanced benefits to undersaved communities, including minorities, women and low earners. The Urban League stands behind all efforts to empower Black Americans and are therefore supportive of the Advancing Auto Portability Act of 2022. The NUL promotes economic parity, self?reliance, and empowerment for Black Americans, which is why we support Auto Portability. On behalf of the National Urban League and 91 Urban League affiliates across 36 states and the District of Columbia, we thank Senators Sherrod Brown (D? OH) and Tim Scott (R?SC) for working together to both codify auto portability and create modest financial incentives to encourage its adoption. This legislation represents a meaningful step towards closing America’s wealth.” ? Marc Morial, President, National Urban League

“I congratulate Senators Tim Scott and Sherrod Brown for leading this bipartisan push to build wealth for underrepresented American communities. Auto portability will help historically underserved and under?saved workers, especially Black Americans, realize greater benefits from the U.S. retirement system—and achieve the American dream of a financially secure retirement. Enshrining auto portability in law is a significant milestone in our national effort to bridge America’s wealth gap.” ? Robert L. Johnson, Founder and Chairman of The RLJ Companies and Chairman of Retirement Clearinghouse, LLC

“The U.S. Chamber of Commerce supports your bipartisan auto portability legislation that will increase retirement savings by making it easier for employees to rollover small balances into another retirement vehicle rather than cashing the balance out. This legislation will be especially helpful for female, minority and younger populations who cash out at higher rates than other groups. We look forward to working with your offices on this important issue.” ? Chantel Sheaks, US Chamber of Commerce 

“This legislation simplifies the rollover process and helps ensure the most vulnerable plan participants preserve their hard?earned retirement savings and save for the future. On behalf of Vanguard’s investors, we commend Senator Sherrod Brown (D?Ohio) and Senator Tim Scott (R?South Carolina) for their dedication to helping more Americans save for a secure retirement.” ? John James, Managing Director and Head of Vanguard Institutional Investor Group

“Senators Scott and Brown are to be applauded for introducing this auto portability bill – while designed to improve retirement savings outcomes for all Americans, it will particularly impact savings for women and minorities who are more likely to be financially strapped and cash out their retirement funds when changing jobs. This bill will make a difference as it helps those with smaller retirement account balances to improve their long?term outcomes and preserve the savings of those who need it most.” ? Cindy Hounsell, President of the  Women’s Institute for a Secure Retirement

###

Related Issues: