An Open Letter to Congress: Every Working American Deserves an Opportunity for a Secure Retirement

As workers and small businesses continue to recover from the financial impacts of the COVID-19 pandemic and market volatility, it is critical that public policy recognizes the challenges working Americans face in building retirement savings while balancing short-term needs.

Congress has the opportunity to pass landmark bipartisan retirement legislation this year to address these needs. This comprehensive framework, often referred to as SECURE 2.0, would create new incentives for small businesses across the country and help American workers save more effectively for retirement.

Key barriers to retirement savings addressed by SECURE 2.0 include:

• Low retirement plan coverage. Today, small businesses still struggle to provide retirement plans for their workers, in large part due to the costs of providing a plan. In fact, since the 1974 passage of ERISA, the landmark retirement legislation, the coverage needle has barely moved above 50%. SECURE 2.0 addresses cost concerns by providing a historic new tax credit to small businesses to start a retirement plan. The credit would cover most of the costs of a plan during its initial years.
  
• Lack of emergency savings support. The COVID-19 pandemic highlighted the urgent need for short-term savings to meet Americans’ everyday needs if they are laid off or face health issues. The legislation provides several ways for workers to save for emergencies while at the same time encouraging saving for retirement.
• Burden of student loan debt. Many young workers starting their careers are burdened with heavy student loan debt, impeding their ability to save for retirement. SECURE 2.0 allows employers to make matching contributions to a retirement plan when workers make qualified student loan payments, thereby allowing the benefits of compounding to begin at a younger age.
• Few later-career savings opportunities. For many workers, particularly women, breaks in employment to provide child or elder care results in disruption to retirement savings. The legislation would amplify savings opportunities by increasing the “catch-up” opportunity for workers over age 60.

With Members of both parties working together to find bipartisan solutions to the retirement and savings challenges created by increased longevity, the pandemic, and market fluctuations, the time is now to capitalize on these efforts and empower employers and employees to address the retirement savings gap by passing SECURE 2.0 this year. We congratulate the Members for their work and ask that this not be an opportunity lost; hardworking Americans deserve better.