Although women have made great strides over the past few decades, they've also been disproportionately negatively impacted by the COVID-19 pandemic. With schools and daycare centers closed, millions of women have been forced out of the workforce since early 2020.1
According to the National Women's Law Center, the average woman loses more than $400,000 to pay inequality over her career, pushing back her retirement date by nearly a decade.2 The Women's Retirement Protection Act of 2021 is designed to help combat this inequality by closing the retirement savings gap and increasing retirement plan eligibility for part-time workers, many of whom are women. Learn more about what's in the Retirement Protection Act and how it's intended to assist women.
What's in the Women's Retirement Protection Act?
This Act was only recently reintroduced in Congress and hasn't yet headed to a vote. But it's received significant support from Democratic lawmakers in both the House and Senate.3
There is no guarantee that this bill will pass.
Among its other goals, the Act intends to:
- Expand the minimum retirement plan participation standards so that part-time workers, those credited with at least 500 hours in a plan year, qualify to contribute to an employer-sponsored 401(k) or another retirement plan after working for the employer for two years instead of three.3
- Expand existing spousal protection for defined benefit plans to defined contribution plans.
- The goal is to prevent one spouse from making potentially detrimental decisions to retirement accounts without the knowledge and consent of the other spouse.
- Provide grants to community-based organizations to expand their information programs to retirement-aged women, providing more information and tools to consumers.3
- Other grants to community-based organizations may support low-income women and domestic violence survivors, helping them obtain qualified domestic relations orders (QDROs) that may preserve their retirement benefits after a divorce or separation.
By expanding retirement plan eligibility, preventing unilateral decisions without spousal notification, and providing educational resources through community-based organizations, the Act hopes to boost women's financial standing both now and in the decades to come.
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1 https://fortune.com/2021/02/13/covid-19-women-workforce-unemployment-gender-gap-recovery/
2 https://www.murray.senate.gov/public/index.cfm/newsreleases?ContentRecord_id=B0A9D8DC-6AA4-4F7E-9DF0-DF460566B41B#
3 https://www.futureplan.com/resources/news-articles/women-s-retirement-protection-act-re-introduced/
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