H.R. 2023: Women's Retirement Protection Act

This bill, known as the Women's Retirement Protection Act, aims to enhance protections for spouses under defined contribution retirement plans. The key elements of the bill include:

Key Findings

The bill highlights several findings related to retirement savings, particularly for women:

• 28% of non-retired adults lack a defined benefit plan or retirement savings.
• A third of the private sector workforce does not have access to a workplace retirement plan.
• Women generally have lower retirement savings and incomes compared to men, especially as they age.
• Women are disproportionately affected by low-wage employment and often work part-time, which limits their access to retirement plans.
• Divorce significantly impacts retirement savings, making it crucial to protect spousal interests in retirement accounts.

Changes to Spousal Protections

The bill proposes amendments to the Employee Retirement Income Security Act of 1974 to introduce enhanced spousal consent requirements for defined contribution plans such as 401(k)s. Key changes include:

• Distributions from individual account plans cannot occur unless the spousal consent requirements are met.
• Specific exceptions will be provided for minimum required distributions and certain transfers.
• Participants must provide a written explanation of spousal rights, and spouses must consent in writing to any distributions or changes in beneficiary designations.
• Certain criteria will allow for exemptions from obtaining consent if a spouse cannot be located or if there are specific other circumstances.

Consumer Financial Awareness

The bill mandates that financial product or service providers must include links to resources from the Bureau of Consumer Financial Protection to inform consumers about retirement planning.

Grants for Financial Literacy

The bill allocates funding for grants to promote financial literacy among women, particularly those of working age or in retirement. It aims to:

• Support community-based organizations that can educate women on retirement planning and financial management.
• Allocate a minimum of $250,000 per grant, with appropriations authorized at $100 million each fiscal year starting in 2026.

Support for Low-Income Women and Domestic Violence Survivors

Grants will also be established to assist low-income women and survivors of domestic violence in obtaining qualified domestic relations orders, ensuring they access benefits from retirement accounts. This includes similar funding as mentioned for financial literacy initiatives.

Implementation Timeline

The changes introduced by the bill are expected to apply to distributions and rollover contributions beginning one year after the bill is enacted, with plans needing to amend to comply within three years.

Relevant Companies

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