Bill Overview
Title: Securing a Strong Retirement Act of 2021
Description: This bill makes various changes with respect to employer-sponsored retirement plans, including providing for the automatic enrollment of employees in certain plans and increasing the age at which participants are required to begin receiving mandatory distributions.
Sponsors: Rep. Neal, Richard E. [D-MA-1]
Target Audience
Population: People with employer-sponsored retirement plans
Estimated Size: 100000000
- The bill targets employer-sponsored retirement plans, which implies it will impact individuals who have access to such plans, generally those employed and receiving benefits through their employer.
- Automatic enrollment changes will specifically impact employees who join or are part of organizations that adopt these plans.
- Changes in mandatory distribution age will affect both current and future retirees who are part of employer-sponsored retirement plans.
- Globally, the impact extends to countries where similar employer-sponsored retirement plan structures exist, typically more common in countries with developed financial systems.
Reasoning
- The budget constraints suggest the policy needs to be impactful but targeted efficiently, hitting the majority of the workforce eligible for 401(k) plans.
- The automatic enrollment may not significantly increase immediate costs but aims to improve future financial stability for young and middle-aged employees.
- Mandatory distribution age changes affect older populations differently, likely causing small long-term shifts rather than immediate impacts in wellbeing.
- Including a diverse set of employee situations, such as part-time, low-income, and high-income workers, will help assess varied impacts across demographics.
Simulated Interviews
Software Developer (Austin, TX)
Age: 25 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 20.0 years
Commonness: 15/20
Statement of Opinion:
- The automatic enrollment in the company's retirement plan has made saving for retirement much easier.
- I'm glad there's a structured way to save without me having to do much.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 9 | 7 |
| Year 5 | 9 | 8 |
| Year 10 | 9 | 8 |
| Year 20 | 10 | 8 |
Public School Teacher (Chicago, IL)
Age: 55 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 10/20
Statement of Opinion:
- I'm nervous about how changes to the distribution ages will affect my retirement planning.
- I appreciate the effort to improve savings rates.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 8 | 7 |
| Year 20 | 8 | 7 |
Marketing Director (New York, NY)
Age: 40 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 15.0 years
Commonness: 5/20
Statement of Opinion:
- Changes in retirement plan policies might slightly enhance my current savings strategy.
- Automatic enrollment is great for my new hires who are often oblivious to financial planning.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 9 | 8 |
| Year 10 | 9 | 8 |
| Year 20 | 9 | 8 |
Barista (Seattle, WA)
Age: 30 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 0.0 years
Commonness: 7/20
Statement of Opinion:
- This change doesn't impact me as I'm not eligible for an employer-sponsored retirement plan.
- I wish there were options for those with part-time jobs to save more easily.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 5 | 5 |
| Year 3 | 5 | 5 |
| Year 5 | 5 | 5 |
| Year 10 | 5 | 5 |
| Year 20 | 5 | 5 |
Nurse (Miami, FL)
Age: 62 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 9/20
Statement of Opinion:
- I'm concerned about the changes to distribution ages potentially affecting my retirement income.
- The automatic enrollment could be beneficial had it been around when I began working.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 8 | 7 |
| Year 10 | 8 | 7 |
| Year 20 | 8 | 7 |
Accountant (Los Angeles, CA)
Age: 28 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 10.0 years
Commonness: 12/20
Statement of Opinion:
- Automatic enrollment makes me feel more at ease about my future.
- I'm already seeing a small positive change in my financial outlook.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 9 | 7 |
| Year 5 | 9 | 8 |
| Year 10 | 9 | 8 |
| Year 20 | 9 | 8 |
Freelance Graphic Designer (Denver, CO)
Age: 45 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 0.0 years
Commonness: 4/20
Statement of Opinion:
- These changes don't really affect me since I'm self-employed.
- I rely on other strategies for retirement planning.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 6 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 6 | 6 |
Retired Engineer (Philadelphia, PA)
Age: 63 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 8/20
Statement of Opinion:
- I've had to adjust my savings withdrawal due to changing rules.
- It’s a bit unsettling but manageable.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 7 |
| Year 10 | 8 | 7 |
| Year 20 | 8 | 7 |
Homemaker (Rural Kentucky)
Age: 50 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 20.0 years
Commonness: 6/20
Statement of Opinion:
- I feel left out of the retirement discussion since I rely on my spouse's plan.
- Would appreciate clearer policies on joint savings or retirement options.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 6 | 5 |
| Year 10 | 6 | 5 |
| Year 20 | 7 | 5 |
Tech Start-up Founder (San Francisco, CA)
Age: 37 | Gender: other
Wellbeing Before Policy: 8
Duration of Impact: 0.0 years
Commonness: 5/20
Statement of Opinion:
- The changes in retirement plan policies don't really apply to my compensation structure.
- I would prefer policies that incentivize investments in diverse portfolios.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 8 | 8 |
| Year 10 | 8 | 8 |
| Year 20 | 8 | 8 |
Cost Estimates
Year 1: $1000000000 (Low: $800000000, High: $1200000000)
Year 2: $950000000 (Low: $750000000, High: $1150000000)
Year 3: $900000000 (Low: $700000000, High: $1100000000)
Year 5: $850000000 (Low: $650000000, High: $1050000000)
Year 10: $800000000 (Low: $600000000, High: $1000000000)
Year 100: $0 (Low: $0, High: $0)
Key Considerations
- Trade-offs between short-term administrative costs and long-term savings efficiencies should be evaluated.
- Impact on federal support programs due to improved retirement security must be monitored.
- The balance between cost to employers and savings on social support programs is crucial in evaluation.