While heralding the bipartisan effort and innovation of active states, ReLab's new report, "State Retirement Reform: Lifting Up Best Practices," seeks to broaden options for future legislation by raising up best practices from the movement's early leaders.

This report demonstrates:

  • State-level retirement reform efforts continue to emerge at a breathtaking pace, with 22 states introducing legislation since Trump’s inauguration.
  • State policymakers are modeling legislation on bills moving forward in other states, following four policy vehicles.
  • The comprehensive hybrid model that combines marketplaces, open MEPs, and auto-IRAs provides the best option to increase access to coverage.
  • State-level programs point toward comprehensive reform in Guaranteed Retirement Accounts.

Due to lack of coverage and a systemic reliance on defined contribution plans, workers do not have enough saved for retirement.

ReLab’s policy note, Inadequate Retirement Savings for Workers Nearing Retirement, documents that the median retirement savings account balance for those nearing retirement is $15,000. 

Employer-sponsored retirement plans are intended to bridge the gap between Social Security and targeted retirement income. Unfortunately, in 2014, 35% of those nearing retirement did not have access to retirement plan, a share that has increased over the last 30 years.
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 In the 1980’s, 401(k) plans - or defined contribution (DC) plans - became widespread. For most workers in the private sector, they replaced rather than supplemented traditional pension plans, or defined benefit (DB) plans.  In theory, DC plans could enable participants to accumulate adequate wealth by the time they retire. But in practice, account balances fall short, reflecting spotty eligibility histories, non-participation, inadequate contributions and employer matches, pre-retirement withdrawals, high fees, and subpar investment returns. These faults are inherent to the DC system and cannot be fixed by regulation.

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 These low savings balances will not be enough to allow retirees to maintain their standard of living, a fact that is true at all income levels. 

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 The combined effects of cuts to Social Security benefits and the consequences of a broken DC-centric savings system has created a retirement crisis. Few workers without workplace retirement plans save for retirement. Without significant reform to the retirement system, many workers who reach retirement age will be forced to choose between working longer and suffering severe drops in their living standards in retirement. But many older workers cannot work longer due to physical or mental impairment, and those that are capable of working face a labor market unfriendly to older workers.

Rather than worsening the retirement crisis by cutting Social Security benefits, policymakers should both strengthen Social Security and expand retirement plan coverage. Guaranteed Retirement Accounts (GRAs) are individual accounts requiring employers and employees to contribute with a fair and effective refundable tax credit provided by the government. GRAs provide a safe, effective vehicle for workers to accumulate personal retirement savings over their working lives.

November 2017 Unemployment Report for Workers Over 55

The Bureau of Labor Statistics today reported a 3.1% unemployment rate for workers age 55 and older in November, a rate unchanged from October. This low aggregate number hides the prevalence of low-paying jobs among older workers, especially women.

October 2017 Unemployment Report for Workers Over 55

The Bureau of Labor Statistics today reported a 3.2% unemployment rate for workers age 55 and older in October, a rate unchanged from September. While this aggregate number is low, the reality is that many older workers have low-paying jobs that don’t provide retirement savings coverage. Older women are especially likely to be in low-paying jobs, in part due to the unequal division of household work.

September 2017 Unemployment Report for Workers Over 55

The Bureau of Labor Statistics today reported a 3.2% unemployment rate for workers age 55 and older in September, a rate unchanged from August. While this aggregate number is low, the reality is that many older workers have low-paying jobs that don’t provide retirement savings coverage.

August 2017 Unemployment Report for Workers Over 55

August Jobs Report

Today the Bureau of Labor Statistics reported a 3.2% unemployment rate for workers ages 55 and older in August, no change from July. While the headline unemployment rate for near retirees is low, it doesn't indicate the economic fragility faced by workers aged 55-64.

July 2017 Unemployment Report for Workers Over 55  

The Bureau of Labor Statistics (BLS) today reported a 3.2% unemployment rate for workers age 55 and older in July, no change from June. While the low unemployment rate may indicate a healthy labor market for older workers, it doesn’t tell us about job quality.

Only 76% of older workers obtain health insurance through their or their spouse’s job. Tweet: One of four older workers lack employer provided health insurance #JobsReport @tghilarducci http://bit.ly/2fd31hM pic.twitter.com/GCFLges2fN </a>/a>; The remaining 24% fall into three groups; those who purchase private health insurance, often at higher prices or with less coverage and higher deductibles than employer coverage, those eligible for means-tested Medicaid, and those who remain uninsured, typically because they earn too much to qualify for Medicaid but too little to qualify for private health insurance.

High insurance premiums and out-of-pocket costs reduce the amount workers can afford to save for retirement, while the uninsured or underinsured risk catastrophic medical costs that can rapidly deplete their retirement savings.

Access to both health coverage and retirement plans protects older workers’ ability to save for retirement. Policymakers should strengthen the Affordable Care Act and provide a path to a secure retirement by expanding Social Security and implementing Guaranteed Retirement Accounts (GRAs). GRAs are individual accounts on top of Social Security that require contributions from employees, employers, and government throughout a worker’s career.

*Arrows reflect the change from the previous month's data for the U-3 and U-7 unemployment rate and the last quarter's data for the median real weekly earnings and low-paying jobs.

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 Percent without Pensions