An ongoing dialogue about retirement.

• Author: Brock, Emily Swenson
• Position: Federal Focus

Lawmakers--possibly motivated by dismal statistics--have been keenly focusing on retirement. Specifically, they've been focused on creating policies that would expand access to low-cost, high-quality retirement plans and help low-income workers and families save.

What are those dismal statistics? More than 38 million people, or roughly 45 percent of working-age households in the United States, had no retirement savings at all in 2013, (1) and nearly half of private-sector workers aged 18 to 64 in worked for businesses that did not offer a retirement plan. (2)

Policies that encourage savings also help safeguard the economic security of the entire community, creating positive effects for future generations. But in the immediate timeframe, these policy solutions often have some impact, either direct or indirect, on state and local government administration. Two initiatives that are gaining considerable attention in Washington D.C. at the moment may have a direct impact: the Department of Labor's efforts to regulate state legislatures' Secure Choice efforts, and the introduction of the Secure Annuities for Employee (SAFE) Act in the 114th Congress.

SECURE CHOICE PLANS

Encouraged by states that are already moving ahead with their own programs to improve retirement security, President Obama recently directed the Department of Labor's attention to establishing rules and guidelines for "Secure Choice" plans. The individual state-sponsored legislation authorizes studies to investigate ways for states to either administer new savings plans themselves or promote a variety of approaches that could be enhanced by state involvement. Over the past few years, Secure Choice legislation has been introduced or passed in at least 25 states. (3)

Secure Choice plans allow states to provide citizens who don't have access to employer-sponsored retirement plans the opportunity to save for retirement, especially since many retirees won't be able to depend solely on Social Security benefits to maintain their standard of living. Although the approaches vary, Secure Choice retirement plans allow states to create a savings vehicle that provides retirement security for those who are employed by small private companies. But because the assets of these plans are often held in the state's treasury, Secure Choice plans create an additional fiduciary responsibility for the state, as the same consumer protection features that safeguard public-sector retirees also apply to Secure Choice plan participants and their dependents.

On July 13, 2015, President Obama directed the...