S.988 - Women's Retirement Protection Act (119th Congress)
Summary
The Women's Retirement Protection Act aims to amend the Employee Retirement Income Security Act of 1974 (ERISA) and the Internal Revenue Code of 1986 to enhance spousal protection under defined contribution retirement plans. It addresses the disparity in retirement preparedness between men and women, particularly concerning access to retirement plans, income disparities, and the impact of divorce on retirement savings.
The bill mandates spousal consent for distributions from defined contribution plans, with certain exceptions for required minimum distributions, small amounts, and qualified domestic relations orders. It also includes provisions for financial literacy programs for women and grants to assist low-income women and survivors of domestic violence in obtaining qualified domestic relations orders.
Furthermore, the bill seeks to ensure that consumers have access to information about retirement planning and economic security through links to resources provided by the Bureau of Consumer Financial Protection.
Expected Effects
The primary effect of this bill would be to increase the financial security of women in retirement, particularly those who are divorced or widowed. It would achieve this by ensuring that women have greater control over their spouses' retirement savings.
It would also increase financial literacy among women through grant programs and improve access to legal assistance for low-income women seeking to obtain qualified domestic relations orders. This could lead to a more equitable distribution of retirement assets in divorce cases.
Finally, the bill could increase administrative burdens for retirement plan administrators and participants, as well as potentially delay or complicate access to retirement funds in certain situations.
Potential Benefits
- Increased Spousal Protection: Requires spousal consent for distributions from defined contribution plans, protecting spouses' rights to retirement assets.
- Financial Literacy: Provides grants for financial literacy programs targeted at women, improving their knowledge of retirement planning.
- Assistance with QDROs: Offers grants to assist low-income women and survivors of domestic violence in obtaining qualified domestic relations orders, ensuring they receive entitled benefits.
- Addresses Retirement Disparities: Aims to reduce the retirement preparedness gap between men and women, particularly benefiting low-wage workers and part-time employees.
- Consumer Awareness: Mandates links to consumer awareness information on retirement planning, increasing access to valuable resources.
Potential Disadvantages
- Increased Administrative Burden: Requires plan administrators to implement new spousal consent procedures, potentially increasing costs and complexity.
- Potential Delays: May delay or complicate access to retirement funds for participants needing immediate access, due to spousal consent requirements.
- Limited Scope: Primarily focuses on spousal protection and financial literacy, without addressing broader issues such as the gender pay gap.
- Compliance Costs: Businesses may incur costs to comply with the new regulations, particularly in updating plan documents and procedures.
- Potential for Disputes: Spousal consent requirements could lead to disputes and legal challenges, particularly in cases of estranged or uncooperative spouses.
Constitutional Alignment
The bill appears to align with the general welfare clause of the Constitution (Preamble), as it aims to promote the economic security of women in retirement. It does not appear to infringe upon any specific constitutional rights or protections.
The bill's provisions regarding retirement plans and spousal consent fall under the regulatory authority of Congress, as established through previous legislation like ERISA. The grant programs for financial literacy and legal assistance are within the scope of Congress's power to appropriate funds for the general welfare.
However, the bill's impact on individual liberties and property rights should be carefully considered to ensure that the spousal consent requirements do not unduly restrict individuals' control over their retirement assets.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).