The current retirement system in the U.S. has not kept pace with changes in the workforce and the economy, the chair of the Senate Finance Committee told an industry group this afternoon.
Sen. Chuck Grassley, R-Iowa, discussed the Retirement Enhancement and Savings Act during a briefing at the start of the National Association of Insurance and Financial Advisors Congressional Conference. More than 600 NAIFA members are in Washington for this annual event.
The Finance Committee held a hearing on RESA this morning. The bill would provide greater opportunities for workers to save and invest for retirement, most notably by allowing employers to band together to form Multiple Employer Plans.
"There are areas where our current retirement system could use improvement," he said. "Today's hearing reflects the Finance Committee's long-standing commitment to giving people opportunities to save for retirement."
Grassley told NAIFA members the current retirement system in the U.S. doesn't reflect the changes in the economy or the workforce. He cited the rise of the gig economy as one area in which workers are falling short in their opportunities to save for retirement.
He quoted the findings of a Pew Charitable Trusts study that showed 40% of small-business employees have no access to workplace retirement savings plans.
"At the hearing today, it was made clear to us that we need to build on the current system and bring more people into it," he said.
NAIFA is making RESA and its similar bill in the House of Representatives, the Setting Every Community Up for Retirement Enhancement Act, the focus of the association's advocacy event. Members are urging their elected representatives to pass the legislation.
Rep. Jackie Walorski, R-Ind., also spoke to NAIFA members about the looming retirement savings crisis in the U.S. Walorski is a member of the House Ways and Means Committee.
"We have to teach a whole generation that the government won't rescue them," she said. "How do you incentivize people to save for retirement?"
Walorski also noted that the current trade and tariff war with China will affect everyone in the U.S. But she said "China has ripped us off of billions of dollars in intellectual property. We need to take care of all our companies, grow the economy and build the American dream."