New bill aims to get government involved in private workers’ retirement

CFOs take note: If this bill passes, Congress will become heavily involved with improving the retirement-savings programs for private sector workers.

U.S. Senators Todd Young (R-IN) and Cory Booker (D-NJ) just introduced the Federal Retirement Commission Act to establish a federal commission to review private retirement benefit programs and submit a report to Congress on how to improve private retirement savings.

In a press release, Sen. Young cited significant changes in the private retirement systems over the past 40 years, a decline of traditional pensions and the emergence of the
“gig economy” as reasons why creating a federal commission is necessary.

Young added:

“With many individuals reaching retirement with little to no savings of their own, we must take a serious look at our current retirement programs and make the changes necessary to help secure the futures of so many hardworking Americans. Our bill would enact a commission to better understand how we can strengthen private benefit programs and ensure our current and future generations have the tools necessary to plan for retirement.”

5 critical tasks

Under the bill, the commission would be comprised of the Secretary of Labor, Treasury, Commerce, two presidential appointees, six U.S. Senate appointees and six U.S. House appointees.

The Commission would conduct:

• a review of private retirement programs in the U.S. with a focus on moving from a DB model to a DC model
• a review of private retirement coverage, individual and household accounts balances, investment trends, costs and net returns, and retention and distribution during retirement
• an analysis of societal trends, including wage growth, economic growth, unique small business challenges, serial employment, gig economy, health care costs, life expectancy, and shrinking household size, that could lead future generations to be less financially secure in retirement compared to previous generations, and
• a review of other countries’ retirement program

The Commission would also be charged with submitting recommendations to Congress on how to improve or replace existing private retirement programs upon the affirmative vote of at least three-quarters of its members.

We’ll keep you posted on this.