Ive been looking forward to this hearing for a long time. I appreciate moving forward with it right now. Weve got rate great witnesses and im sorry we have to be remote because i would love to be in person. Challenge. And weve had plenty of opportunities to speak and will continue to, but this, i think, is really exciting because Retirement Security, to me, is not only just critically important for all americans and, frankly, savings has taken a hit, as you know, during the coronavirus, but also, this is an opportunity for bipartisan work, and i think well hear about this later from senator brown, senator cardin, and others. But regardless who gets the majority in the senate come january, this is an area where i think we have the potential to make some real progress, because i think it has been, and will be, bipartisan. And when you look at the support it has among the American People, it is really impressive. I mean everybody talks about who supports what in terms of tax policy, i can tell you the idea of being able to save more for your own retirement is just broadly popular, so this is an opportunity for us. I have worked a lot with senator cardin, over the years, on these issues. I notice he is in the hearing. Well, he is in his office, so i wouldnt say he is in the hearing, but he is joining us remotely. And you know, weve done some good things, helped people save more for retirement, and it has improved Retirement Savings considerably. Last year, we introduced the latest iteration of portmancardin, and thats called the Retirement Security and savings act, which has had some broad support, bicameral and bipartisan. In fact, 27 of the portmancardin provisions were included in this new secure 2. 0 legislation introduced by the ways means chairman, a democrat, richie neal, and the Ranking Member, kevin brady on the house side. If thats not bipartisan, i dont know what is. So, the two of them coming together i think is terrific and there are some provisions in ours they do not include and there are some in theirs we do not include, but i think that, in my view, is an opportunity when you have so much Common Ground between the two proposals. So i think its a really good starting point and again it gives us a real opportunity to get something done. A lot of our other colleagues have worked on this issue. Sherrod brown has worked on it on a bipartisan basis. Senator daines and senator warren have a retirement lost and found bill that i think is interesting; senator collins and senator hassan have their assistance to military spouses, which i like. So i think there are a lot of opportunities for members of the committee and even outside of the committee to come together on something here. The one that ben cardin and i have introduced recently focuses on what i think are the four big problems that can be identified and addressed through legislation. One is to help lowerincome and parttime workers. And this is an obvious issue, you know you only have 20some percent of people who are parttime and lowincome saving now, so when people are living paycheck to paycheck, its tough to set money aside and so we help in that regard in a number of ways. Second, it focuses on Small Businesses. Why . Because that is where the opportunity is. Less than half of workers employed by Small Business have access to an employersponsored plan. Think about that. Thats compared to 88 percent of workers employed by Large Businesses. So, its Small Businesses, thats where we really got to target and focus to expand coverage for so many working americans. And eric talked about his restaurant business, a lot of them are Small Businesses like that, that just cant afford to put together a plan so we help them in that regard. And theyre also concerned about the complexity of it. Third, weve got an issue with the baby boomers. A few of us on this call would fit into that category. And we just arent saving enough as a generation, and havent been. And therefore, we do some things to help encourage people who are getting ready for retirement, near retirement, to save more. And then finally, as folks are living longer, retirees, even those who have accumulated some savings, are finding that they are outliving those savings. Living longer is good news, longer, healthier lives is great, but its tough on our bank accounts, especially when current laws force americans to start depleting and taxing their Retirement Savings accounts at age 72. Thats an issue too, and you know that longterm savings piece, how do you ensure that nest egg is adequate for People Living longer and healthier lives, is a key issue. So, weve made progress on some of these issues, but the lack of sufficient Retirement Savings remains an urgent problem for our country and its an opportunity, again, for us. In 2020, weve moved this legislation to this point, now, in 2021, weve got to get it across the finish line. Unfortunately, the pandemic, as we talked about, has just exacerbated the need to improve savings. We may not be seeing a vshaped economic recovery in this pandemic. I think were going to see more, as we have so far, a kshape recovery. And its k in terms of savings, meaning its not just going down like it normally would in a recession and then back up the same way. You have some people who are doing well and others who are not. And many of these who are not are some of these middle and lowincome parttime workers we talked about. Thats why we allow those workers to have more opportunities through both expanding savings plans for them, but also allowing parttime folks to be able to access plans more easily, lowering the number of hours someone works where they qualify, in particular, in a Retirement Plan. We also make the savers credit refundable, which is not without controversy, i understand that. And some of my republican colleagues have concerns there and we can talk about that later why i think thats important as part of an overall balanced plan. We also have a provision that allows recent graduates to receive matching retirement contributions from their employers as they pay off student loans. This is a good connection between an obvious problem out there with Student Loan Debt and retirement, so its a way to approach both. Our second set of solutions on Small Business i talked about makes it easier to establish plans. We increase the tax credit. We have a lot of companies who want to adopt autoenrollment and encourage their employees to save more for retirement. But that can be expensive, so it does enhance the startup credit for Small Businesses. It makes offering autoenrollment features much more Cost Effective for employers. We like autoenrollment, we make it more Cost Effective. For those near retirement we talked about, we want to be sure that those who are saving money have the opportunity to be able to spread that out over time. So thats part of what we do here through qlacs and also changing the minimum required distribution laws to take you up to 75. By the way, before the pandemic, 9. 7 of americans 75 and older were working. Its, im sure, more than that now, but thats up from just 7. 5 ten years ago. So again, we have more and more americans, again, working into their 70s. Thats just the reality. Like all good legislation, we have taken ideas from senators from both parties, and we know theres more to do and more to improve it. I think we can learn about that today in this hearing because we have some great witnesses and great colleagues who are on the dais. So with that, let me recognize my colleague, and my friend and fellow ohioan, Ranking Member Sherrod Brown for his Opening Statement. You,or brown thank senator portman for scheduling , this hearing and to our witnesses for participating today. Im especially appreciative that mr. Barr is ohio. Rom queens hill, i grew up in in mansfield and i appreciate mr. Stevenson being here from columbus, ohio, from nationwide so thank you and i appreciate our colleague senator Casey Ben Cardin and others being on the call. Thank you for your Public Service and leading the same. And mr. Luskin thank you. The focus is Retirement Security. We cant talk about that without acknowledging the looming crisis on the minds of millions of retired americans and workers in ohio and across the country. Literally tens of thousands of oho wins thousands of ioans are affected by this. These workers and retirees in the multiemployer Pension System are in danger of losing the Retirement Security they earned over a lifetime of work. This crisis affects thousands of ohioans. It affects the massive Central States pension plan, the ironworkers local 17 pension plan, the ohio southwest Carpenters Pension plan, the bakers and confectioners pension plan, and so many others. And it touches every state in the country. It touches most firmly or most destructively in the part of the country senator portman and i represent. If the entire multiemployer system collapses, it wont just be retirees who will feel the pain. Current workers will be stuck paying into pensions theyll never receive. Small businesses will be left drowning in pension liability they cant afford to pay. Businesses that have been in the family for generations could face bankruptcy, and workers will lose their jobs. These plans were already in danger before the pandemic, and now the economic emergency were in has only put them in a worse position. They were hit by the financial crisis and the recession that followed, and now theyre being hit again by an economic crisis thats disproportionately hurting Small Businesses and workers, while wall street recovers. The house has done its part. They have passed a bipartisan solution. The senate needs to do ours. A pensions system should be part of the work were doing on covid relief. Theres no reason we shouldnt be able to do this as part of a yearend deal. I ask my colleagues to think about the workers whose lives and livelihoods will be devastated if we dont do our job. Those workers and retirees in ohio and round the country have rallied in the name of butch lewis, a great ohioan who helped lead this fight, and passed away far too soon, fighting for his fellow workers. He was in cincinnati. His wife rita has continued his fight, and become a leader and inspiration to so many. Rita once told me that retirees and workers struggling with this crisis feel like they are invisible. These americans arent invisible to me. And they arent invisible to my colleagues who have worked with us for years now, trying to find a bipartisan solution. We just cant give up on that. Though the multiemployer system is the most urgent retirement matter, we also have a lot of work to do to protect and expand Retirement Security for all workers. Over the past few decades, weve watched what happens when wall street runs the economy corporate profits go up, ceo pay soars, and stock buybacks explode, but wages are flat, and the middle class shrinks. Thats the fundamental problem underlying this whole crisis. That wages are flat and the middle class shrinks. And as americans Economic Security has eroded, so have their retirement options. Too many workers have no retirement account through their employer. Fundamentally, our tax system is set up to reward the already wealthy with more wealth, instead of to help everyone save and invest for their futures. 40 of adults dont have 400 to weather a financial emergency, let alone save for retirement. Instead of focusing on those who already have plenty saved, we have to do more to help everyone else get started in the first place. That i hope is what this hearing will mostly be about. And weve had four years of an administration that made things worse, not better. In his first months in charge, president trump, with help from the republicancontrolled congress, made it harder for states to get autoenrollment programs off the ground. President trump and Congressional Republicans massive tax cut for the wealthy and corporations threatened deep cuts to Social Security and medicare. Just yesterday, the Senate Confirmed a trump appointee to the federal judiciary who has advocated for abolishing Social Security. But this november, 80 million americans decisively rejected that approach. People are tired of a system where wall street runs the show. They voted for a new president and a new direction. Next year we have a real opportunity to do something concrete for middleclass families and lowpaid workers who need help saving. We know what some of these solutions are. We have to do more on autoenrollment and on autoescalation. The states that have introduced autoenrollment plans, like senator wydens state of oregon, have seen real success in the early years. Autoenrollment is a best practice in helping people save. And we have to do more on portability, so our retirement policies reflect the workforce we have today. Job flexibility shouldnt be a corporate pr term for having no Economic Security. We have an opportunity to do big things for the American People fix the multiemployer pension crisis, instead of allowing it to grow. Protect and expand the Social Security benefits that people earn, instead of threatening socalled entitlement cuts in the name of newfound religion on the deficit. Build a defined contribution system that is inclusive, that is equitable, and that meets the needs of todays workforce. Instead of relying on the status quo that works well for some but i leaves but leaves too many behind. Thats our mission that should be our goal and i thank very much senator portman for doing this hearing today. Thanks, rob. Portman thank you, senator brown. Let me say the focus of this hearing as you know is on the Contribution Plans and thats that weve got folks here talking about and we talked about the portman carden legislation which we can try getting on for some time. I totally agree with senator brown on the multi employer front. Weve got to solve that problem. My understanding is that there are discussions ongoing with the house leadership in the senate leadership, and my fervent hope is in this final package whatever it is come with this continuing resolution i hope onis not whether it is the spending bill or whether its a covid19 package in some way that we include smalltime employer pension reform. I think we have a good compromise that is consistent with the plan will talk to in connection with the select committee which was formed to look at this but this is urgent for our businesses, urgent for retirees and is urgent for our economy so we cannot let the Multiemployer Plan Program go under water which is whats going to happen if we dont solve the problem. So with that i can thanks to my colleagues are being on. Well get to our witnesses. I thank you for your opening comments, senator brown. We got a great group of witnesses who are as as i said experts on this issue particularly on the issue of how to help people save more for their retirement. Im going to take a couple of minutes to introduce them. The. Irst is scott barr a Financial Advisor serving Small Businesses, employees and individual investors at his zanesville, ohio, branch. He began his career with edward jones in 1999. I really appreciate edward jones helping us on these bills over the years and thank you, scott. Hes a licensed accredited Asset Management specialist pick use making it for graduate of miami university. The next witness is mr. Eric stevenson. We talked to eric hurley. Is president of plans at nationwide insurance. Eric brings more than 15 years of industry experience to his position currently managing the team responsible for nationwide Retirement Plans operations with nearly 115 billion in assets under his management. Eric served as Senior Vice President of nationwide distribution across both 401 k and 457 businesses. And join nationwide in 2006 in Life Insurance marketing and soon after that joined the Retirement Plan. Her third witness is mr. Michael krep. S. He advises a wide variety of health matters. Administration investments, funding. Nickel routinely represents clients before regulators. His experience includes serving as a senior pensions and employment counsel for the u. S. Senate committee on u. S. , health, and labor. He holds a jd with honors from the George Washington University Law school. Last but not least, we have mr. Joshua luskin he is the director of administration for defined contribution. They include publicsector workers, University Staff and more. His past experience in the private sector was in retail banking, Financial Education and fiduciary oversight. Haveve some witnesses that some realworld experience. We appreciate them coming. Startrr, why dont we with you. You are up. Mr. Barr thank you, senator portman. Chairman portman, ricky member brown, thank you for inviting me to testify on the important issue of Retirement Security. My name is scott barr and i have served as a Financial Advisor with edward jones for the past 21 years. As a native ohioan, it is my honor to address both the men who served me and the people of our great state. I would like to express from the outset edward jones strong ofport of the savings act 2019. Edward jones offers a variety of services that helps individual investors and Business Owners achieve security. Over 19,000 advisors serve more than 7 million clients and care for more than 1. 3 trillion of their assets. I am here because i had the privilege of helping hundreds of my clients plan for and achieve financial security. My clients have confided in me what is most important to them and they have trusted me to partner with them to guide them toward financial goals. I found that my Small Business clients care deeply about helping their employees prepare for their own environment for their own retirement. Theyre interested in retirement. Avings options they know it is the right thing to do. Our nations private retirement saving system has been a success. It has enabled folks to build nest eggs that will help supplement income they expect with Social Security. Congressional efforts have clearly worked. Edward jones is very encouraged by the recent congressional effort in the secure act. The new tax credit for the automatic enrollment were significantly important to a small surveying firm i helped establish. These efforts build on decades of bipartisan support for our nations private savings system spearheaded by the work of senators portman and cardin. As someone who works with clients everyday, i would like to take this opportunity to say thank you for these efforts. Senator brown, thank you for your leadership and dedication, helping the working families of ohio say for a secured and dignified retirement. I would like to thank chairman grassley and reiki member wide and ricky member widen for their leadership. Progress,e have made and Ranking Member widen for their leadership. That will first make it easier and less costly for businesses of all sizes but especially Small Businesses to offer workplace Retirement Plans and second, increase opportunities and eliminate barriers that currently prevent americans from adequately saving and preparing for their financial future. In pursuit of these goals, i reiterate our strong support. If enacted, the Retirement Preparedness would significantly improve. Would like to highlight our support for a few provisions we believe would be effective in reducing the coverage gap for Small Business employees as well as increasing the Retirement Savings of all americans. Edward jones supports a provision that would increase the start up tax credit made available to small employers when they establish Retirement Plans. Employer cost is the most havoc and barrier to the creation of workplace Retirement Plans. Incentivesworkspace for employers to offer enrollment programs. By directly offsetting some of creditloyer costs, a tax based on employer contributions would be a game changer for employees. We support expanding ira offerings. They are so important to Small Businesses. The same benefits enjoyed and a larger plans such as 401 k s and government 457 plans. We support allowing employers to make matching contributions to retirement. Yees i would like to acknowledge senator widen for his leadership senator wyden for his leadership. Additional contribution to their Retirement Plan. I know many clients who would take advantage of this important provision. We support increasing the requirement of distribution age to 75. Americans are working and living longer. This change would help address the greatest concern i hear most often. That they will outlive their Retirement Savings and become a burden. In closings, on behalf of edward jones and myself, i would like to thank chairman portman, wrecking member brown and the rest of the subcommittee for holding this hearing. Edward jones fully supports Portman Cardin. Help more it will americans enjoy the security and dignified retirement and they are working so hard to achieve. I would be happy to answer questions. Chairman portman thank you, mr. Barr. All witnesses trying to keep your comments to five minutes. Mr. Stevenson. Mr. Stevenson good morning, chairman portman, wrecking member brown. My name is eric stephenson. I am president of Retirement Plans for nationwide. Providing a full suite of insurance and financial services. We represent over 26,000 plans across the country. Small, medium, large size plans. Over 150 billion in assets. Where the number one provider of plans and the 450 seven place. I would like to thank chairman grassley, wrecking member wyden Ranking Member wyden for the work you have done over the years or we would not be having this conversation. One of one additional thing we have in common is around ohio. We represent the ohio defined Contribution Plan for the state of ohio. We protect 75,000 ohioans, their state on thes the corporate and government side. We employ 15,000 associates in columbus. Also in maryland, we represent about 7 billion of assets for residents of maryland. 7 billion in total assets. Ts and0 of your residen the state of maryland, a number of counties and corporations across the state. Most notably, the first governmental plan that was started was the state of maryland. I will tell you about a story about that a story about that later. Of as proud supporters 1431, the retirement securities and savings act. This legislation builds on bipartisan work accomplished i the secure act with Bipartisan Solutions to help americans prepare for and live in retirement. We have been busy operationalizing the secure act with solutions around income solutions. Once participants have done the hard work of saving for retirement, we help take the income in a smart and sufficient way. I would like to connect our conversation and the provisions you have to three categories. First of those is meeting todays financial needs. Second is saving for retirement. Is living in retirement first thing you have to do is meet your immediate needs. One of the biggest obstacles is Student Loan Debt. It is not just kids graduating anymore. It is folks into their 20s, 30s and 40s that are burdened with this. We believe the existing retirement system can play an Important Role in alleviating some of the pressure. We support the proposal permitting employers to make matching contributions to a Retirement Plan based on student loan repayment. This will oh workers who otherwise could not start saving for retirement. I mentioned the state of maryland. We have a participant who joined our plane four years after it started. The highest salary he ever made was 83,000. I can tell you today after 20 years in retirement, he still plan. 00,000 saved in that that is because he started early. That is why we are so supportive of that legislation. When it comes to saving for retirement, the provisions are around catchup provisions. Ofknow that nearly half americans do not have 400 saved. There is some studies that suggest a lot higher. Anything we can do to get more people enrolled and help them get started and avoid some of the traps is important. Along with our friends, we are excited to make collective Investment Trust available to follow three b plans to 43 b plans. Cits are a proven Cost Effective way to people save and they are widely available in 401 k plans. We think we should make those in 403 b plans as well. Ensuring that government plans have a level playing field. It is through our partnership that we have helped to sponsor and fund the public Retirement Research lab. Finally, living in retirement. Nationwide is thinking about how we can help participants which their goals. We know 25 of the people 65 years old now who lived to be 90. Are provisions increased indeed to 75. You can tell that nationwide and i personally am excited about helping achieve Retirement Security. We hope to be a resource today and going forward. Chairman portman thank you very much stevenson. , you are up. Mr. Kreps good morning. Wreckingike to thank the report many friend buddy me today. The topic of this hearing is important. I think we can agree after a lifetime of hard work, everyone deserves the opportunity to live out their golden years with dignity and financial independence. In 1935 at another time of Great National hardship, president roosevelt working with congress created Social Security to stamp out elder poverty. It has been 85 years and Social Security is still the bedrock of our retirement system. It is the most effective Antipoverty Program in the united states. Social security benefits on their own are not enough to allow most Older Americans to maintain their standard of living when they retire. That is why we need a robust, equitable and inclusive private retirement system. Over the years, our private retirement system has evolved and there have been many important improvements. There is still more work that needs to be done for those following the cracks. Many working people still do not have access to participate in an employer provided plan. That is true for private sector employees where younger, parttime and lower wage occupations. Stopping ushing from taking affirmative steps to reach this workforce and give them the opportunity to prepare for retirement. Several states including california, illinois, oregon and others are already trying to address the problem through statebased systems to provide for universal or near universal access. Similarly, Washington State working with seiu established a savings plan to help home care workers. Most of whom are earning very little display providing Critical Care to our sick, disabled and elderly philly members family members. We cannot forget millions of working People Struggle to pay their bills let alone save for retirement. Congress took an important step to address that issue in 2001 to create the savers credit for certain Retirement Plan contributions. The savers credit does not reach nearly enough people because many lower income workers do not have taxable income. We can fix that. We can make the credit refundable. We can have a directly deposited into peoples savings plan. That approach has bipartisan support. I commend chairman portman, he member brown, senator ca rdin for their leadership over the years. We should also plug some of the holes that drain peoples savings. Close to half participants withdrawal part of their savings during a job change. Fortunately, the development of auto portability help preserve savings for job changers by allowing accounts to automatically follow them from one plan to the next thanks to guidance from the department of labor and strong support for members of congress including many members of this subcommittee. It will be a reality for millions of Plan Participants early next year. Finally and most importantly, we cannot ignore the fact we are on the brink of more than a million americans learning americans losing their hard earned pensions. Some plans including some large plans will become insolvent in the next few years. The federal Pension Insurance program only guarantees a fraction of multiemployer pension Plan Participant benefits. Worse yet is the multiemployer Insurance Program will be insolvent in 2026. One that happens, pbgc will only be able to pay pennies on the dollar. Participants and retirees will see their benefits slashed to the bone. It is not therefore there plans are failing. They worked hard. They played by the rules and made significant wage concessions so they could have some measure of Economic Security. They did everything they could to achieve the american dream, but they are living a nightmare. Unless Congress Acts soon, retirees, their families and communities will be devastated. The crisis is upon us. Leigh congress has the power to do something about it. We are the richest country in the history of the world and we owe it to our fellow americans to find a solution. That is going to require putting aside politics and ideology and doing what is right for retirees. There is no time to lose. The problem becomes more difficult and costly to fix. I urge members of the subcommittee and every member of congress to act as soon as possible to address this crisis. Thank you for your commitment to making retirement more secure for americans. I would be happy to answer any questions you have. Chairman portman appreciate your insights. Morning, i am the current president of the National Association of government to find contribution administrators. States, 132 local Government Entities including cities, Public Safety agencies, School Districts and utilities. On behalf of negative, we think chairman portman and rocky member brown for holding this important hearing to explore ways to improve federal law that great greater benefits that create greater benefits. Additional appreciation is expressed to chairman grassley and Ranking Member wyden for their ongoing commitment to retirement to improving Retirement Systems for america. Long tradition of partnering with privatesector firms to identify new opportunities to improve retirement outcomes. We collaborate with an ongoing basis on everything from education to policy development. Nagda is excited about a new research lab. We are thankful for the critical support and members of great Corporate Partners including nationwide. With the pearl, we are building the largest aggregation of data that will allow sponsors to commit resources and time for datadriven institutions. We are grateful for the opportunity to testify today in support of our bipartisan proposals. If proposals are directly aimed at improving outcomes for approximately 60 million teachers and hardworking middleclass americans and state and local government service. These individuals provide services that support communities live in. Proposals were invented by many dedicated volunteers over many years. We are happy to say each one has been incorporated into the retirement securities in savings act, which you introduced together with senator cardin. We thank you for your partnership with naida. I will highlight one proposal and briefly mention three more. One proposal is to amend the securities laws to permit for three b plans to invest in Investment Trusts. The members also propose to the organization and push for priority because of the potential benefits for participants. The same benefits that participants in other plans are currently benefiting from. They are currently limited by statutes to mutual funds and annuity can realize lower administered of costs and greater flexibility. Blackne example of estimated that lower fees can result in more than 100 william dollars in aggregate savings per year for these 403 b participants. Year careers,s the values of the savings could impact peoples lives. Other to mention two provisions believe would make it easier to consolidate assets. Consolidation of assets is a proven method to unify Investment Strategy as well as providing lower fees. Suggest nges we offense tow produce withdraw from accounts to roll roth ira assets into employersponsored plans. We encourage congress known as the first day of the month will. Participants if they want to change you have to make the change before the first day of the month in which then the change will go into effect. This provision was enacted as administrative convenience prior to the advent of modern technology. Not only will eliminate and make life easier for Plan Participants but we believe also we believe it would also help participants make better savings decisions. Chairman portman and senator brown thank you again for this opportunity to some of our ideas about how to improve Retirement Systems. I look forward to working together to support changes which can result in better outcome for so many hardworking people. Thank you. Chairman portman mr. Luskin, thank you very much a thanks to all the witnesses for their helpful testimony. We will now go to questions. I will be here until the bitter end and enjoying every minute of it except when i have to run out for votes. I am going to invest my questions later because some colleagues on the line and they will have to run. We have a vote scheduled for 11 00. Vote, but somed of your going to have to take the gavel so we can be continuous. I dont want to stop this hearing. The order we have is based on when colleagues showed up for the call. Start off up with senator brown and then senator grassley, senator bennet, lankford, casey, courts casey, senator young and senator whitehouse. Lets start with you, senator brown. Brown if chuck wants to go first, im fine with that. Chuck, wouldman you like to go first . Senator brown i think he is on mute. Chairman portman senator grassley, we would love to hear from you first. Anator grassley there are couple short things i want to announce. First of all, thank you, chairman portman and senator brown for this hearing. It is very important. Senator mcou and cardin on your leadership. In the coming days i plan to , introduce legislation that builds on the secure act and the important provisions of portmancardin as well as stuff in the recently introduced house ways and means bill that chairman neal and Ranking Member brady put into place. And then secondly, before i ask questions, just a follow on what senator portman had said about our efforts to get a multi employer pension thing. We had been negotiating with our democratic colleagues for more than a week to find a solution multi employer pension and i would still like to find a way to reach a deal. Both sides have very much been working diligently and very much in good faith. And i appreciate that. We plan to keep at this problem until we find a solution. Covid19so to impact for my first question. For all witnesses. The pandemic continues to cause pain for many individuals and businesses and ive heard from a number of iowans that the pandemic has affected their Retirement Savings or even a reduced their Retirement Savings. I know many provisions have already been mentioned but watch to each of you see as the most relevant and are generally needed given the Current Crisis we have with the pandemic . In order you want to jump please. Grassley this is , scott barr with edward jones in zanesville. I think i would like to take a shot at answering your question. I think its a great question, and our firm believes the portmancardin bill was packaged to structure to address the needs of a lot of different sectors of the economy and sectors of workers. So folks that are affected by the pandemic i think would benefit from the bill as it stands right now. I think its a great question. Senator grassley anybody want to add to that . Mr. Kreps this is michael kreps. Thank you so much for the question and obviously the pandemic has had a pretty profound impact on working people both moderate, upper and lower income working people. In the cares act, congress provided some helpful relief to people to have access to their Retirement Savings. We have to recognize that a large portion of the population does not have a lot saved in their Retirement Plan and we need a Strong Social safety net to take care of folks and support families in crises like this. Senator grassley do either of the other two of you i will try not to be redundant. A couple things i would call out, number one, the student loan provision and portmancardin would be an important piece to that. People just have to get in the habit of saving more. Thats a great way to start. The second one is the volatility we have seen in covid. Not just people taking money out but investing poorly when the market went down, they sell. When the market goes up they buy. The first secure act, the income allowed us to put guarantees inside Retirement Plans will really help us reduce some of that volatility for participants and help them be much better prepared over the long term in terms of adjusting. Senator grassley thank you. Go ahead, sir. As my colleagues just mentioned, we do believe that the portmancardin package was structured very carefully to address the different needs that many People Struggle with currently. Theres a lot of different populations that are impacted. Having multiple tools to be able to address it, there is some value. Thank you very much for the question, mr. Chairman. Senator grassley i dont have 00 in front of me so when i use my time youll have to tell me. , mr. Stevenson, you note both the opportunity and the means to save are needed in what you call the beginning planning stage of savings. I agree with you that both are essential. Question, in your opinion how , important is automatic enrollment in this equation . Stevenson yeah, i think its very important and i would add another one of the provisions in the bill is around the savers credit. I think thats an important provision. We need both the means and opportunity. Auto enroll and auto escalate creates the opportunity. The tax saversd credit especially the part that , allows the refund to go right into the account for Retirement Savings and not spent i think is critical. Senator grassley ok. i guess i have time for one more question. So mr. Barr, in your testimony, you cite data that says 37 of the businesses point two the cost as the main reason for not starting a Retirement Plan. The current small start up Business Credit seems to do seems to decrease some of those costs. In your view, would be the most helpful in bridging the Small Business coverage gap . Mr. Barr but is a great question, senator. Thank you for your question. I think the start up credit is a major player in this. I think the number one issue that i run into with my Small Business client is cost. Expense is the extra going to the Firm Supports entirety of portmancardin because it really very closely addresses those issues. In addition, the auto enrollment and the auto escalation, both of those provisions go a long way toward encouraging businesses with the tax credit that is associate with that come with that, encourages businesses to make that as part of their plan so that they can help their retirees save. Or their employees save, rather. Thank you, senator portman. Thank you, mr. Chairman. Mr. Chairman, we gave you some leniency because you are mr. Chairman, by thank you for raising the question of the clock. The finance committee is not able to put the clock on the screen today. However, were keeping a clock here, and if its ok what i want to colleagues is limit the questions to five minutes and then at the fiveminute mark i will indicate when we are probably a minute out. Or 30 seconds out, how about that . So we can try to keep as many questions as we can get in today. Were happy to have a second if people able to stay. Senator brown, youre up. Sen. Brown there is a clock on the screen, list some of us can see. Mr. Stevenson, you said in response to the first question people should get an habit of saving more. If you and mr. Barr would both answer this question, what is edward jones, what is nationwide doing to help low income families save for a dignified retirement . I will jump in. Its a great question, senator brown. The key for us is we have to get people started early. The education, how we shall come how we show up, how we provide retirement education and engaging them, employers, small and Large Businesses than done a great job of providing incentives and then its up to us to make sure to go out and engage them and get them enrolled in the plans and get them started and keep them in the plans. The provisions in this bill around, again whether its a , savers credit, whether its out of control, auto escalate, and when people can see the progress they are making thats amazing. In the previous secure act one of the provincial start off showing people what their savings look like in terms of monthly income. Thats been a huge add to the plans so we can show them pensions, other Social Security show them that in one picture, its very encouraging for people to get started instead engage in the process. Mr. Barr, would you add to that . I think he had a great answer. I would point out from what is iti would point out from what is edward jones doing, senator, in my practice edward jones i think as much as any firm out there, opens the doors to serious longterm investor across the entire income spectrum and socioeconomic spectrum of folks who value the service and advice that we provide. In addition, we support the entirety of portmancardin and we believe that the savers credit provision and enhancement to that is a great way to help folks, low and middle income savers saving for retirement. Thank you both. Mr. Kreps, i wondered as to the multiemployer pension crisis. Thank you for your testimony. Whats the effect on the economy if congress doesnt act soon . With that impact be limited to Union Workers and retirees in these plans or does it go broader than that . Thanks for the question. Its an important point. When one million participants over 1 million participants lose , their pension benefits, thats going to be devastating for those families obviously. People will be forced with the horrible choice of trying to decide whether to use the limited assets they had to keep the lights on, or to buy their medications. But its going have a devastating impact on communities as well. In the midwest and across the country that are multiemployer Plan Participants that are affected by this all over the country. When their pensions are ripped away from that it will be like taking the leg up from a table, full committees will be destabilized ecosystem becomes wobbly. Children will have to support their parents and it will be burdened. The government, governmental systems and support systems we have in place to the extent we have them are going to be taxed. Trying to support these communities the businesses that , rely on the dollar being spent in the communities, the employers who are going to be faced with increasing liability if they are unable to continue to keep people employed, its going to have ripple effects that go across the economy which is why its so important to deal with it now and not wait any longer. Now notng with it dealing with it now means it gets worse the longer we wait, correct . It gets worse every day we wait. A note to my colleagues have for years weve been hearing this the longer we wait the worst its going to be. It would been cheaper to fix three years ago, what event cheaper to fix last you and i were in the middle of an economic crisis that is draining peoples savings and retirees cant wait. Let me in the last minute go one more place with you, mr. Kreps. We know people change jobs more often than they used to. When they do, they are often denied a chance to build Retirement Savings that mr. Barr and mr. Stevenson talked about getting people in early. Many corporations have made part of their Business Plan to deny responsibility for millions of the workers using independent contracting and subcontracting to get out of their part to contribute by doing the part to contribute to their employees retirement. What can congress to about the socalled missing participant problem and improving portability for workers who move from job to job over 20 or 30 years . This is a great question and an important one. Often times when people change jobs, they lose track of their retirement accounts. Its happened in my family members. They have missing accounts elsewhere, and that lost savings can add up over time and so the missing we can do, or one of the best things we can do is to encourage the use of automatic portability. So that as people change jobs, their accounts follow them from job to job by negative consent. Additionally, there are some legislation about a registry that could be very helpful in addressing that problem. Thanks, mr. Chairman. Thanks to all four of you. Thank you, senator brown. Senator bennet. Senator bennet, are you on you or you you not with this any longer . Senator lankford. Blunt senator portman, thank you very much. And senator brown both for hosting visiting. Tremendous asset to get in this conversation to senator portman and senator cardin piece of legislation he worked on for a long time. I appreciate all the work thats gone in on it. I have several questions both a both on the retirement side and on the Emergency Fund side but have really pressing question for mr. Stevenson first. If i understand, you were born in oklahoma but you now live in ohio, is that correct . Thats correct. So if i were to say the letters osu to you, is that Oklahoma State or ohio state we are talking about . With all respect that would be Oklahoma State, my little brother. That would be my assumption as well. I just wanted to clarify that i just wanted to clarify that because thats an important feature in this particular. Earing just thought i would check. Im not try to get you in trouble, just trying to bring clarity into this as well. Mr. Stevenson, let me ask you i noticed from your testimony that youre saying about 20 of the withdrawals you are seeing right now from Retirement Funds are covid related issues of people who didnt have Emergency Funds. We talked a lot about Retirement Funds. I want to bring up the issue on Emergency Funds for you. How do we encourage people to set aside more liquid assets as an Emergency Fund while we are all still trying to deal with Retirement Funds as well . Thank you for the question and i think while its not part of this provision, this bill yet i think it is a very important , piece that would go a long, long way. What we have seen, weve seen almost 900 million in covid related withdrawals since april and the last 60 days weve seen those numbers increase each week. What we talk about, nearly half of americans dont have 400, i think there is a pretty straightforward way we can create some legislation that would allow that to be part of our 401 k can for 57, 403b plans where that money, the first 400, the first 1000 is available to the participant for emergency savings, for a four and unforeseen nonemergency. That would really encourage people to start saving early. One of the barriers people to is they cant get access to the money. If we make that first 1000 available available i think will help, well see less impact from an event like covid. So is a correct number or 1000 should that number be higher . It sounds like using at least howd you come to that number . 1000. I dont have the position it on i dont have the position it on the exact number. Id love to work with you and others in terms of determining that number, but we think that is in the right ballpark. We dont want to take away from the longterm savings that we do think its an important provision and its very expensive and timeconsuming for a participant to go through the process of requesting alone. Think about that, when you are right out of college and your transmission goes out and you need 400 or 800 to repair that can you go to credit card, your parents, or do you get a loan out of your 401 k . We think theres a much easier, much more efficiently. Let me ask one more question on this and want to open us this up to the whole. Mr. Stevenson, you have expansion retirement and employees. Many individuals that are in hourly jobs are just Getting Started or in restaurants and other places i would assume many , people that are even on this conference right now started work in a restaurant as i did years and years ago on that. But very rarely would you start Retirement Planning at that point as well. Its not easy to do. Your parttime, hourly and even setting aside small about is more complicated. Are there ways we can actually engage with that individual who may be 19, 20, 22 years old just Getting Started or someone just out of college at an entrylevel job to be able to do Retirement Savings, but they assume theyre going to switch jobs so its difficult to do Retirement Plans with an entity you are then trying to be able to move. Is there an easier way to do that . A couple of thoughts. One is the ability for portability across, adding that. That would make a big difference. Number two, we talked about emergency savings. Number three, any of those these are all two are provisions that are already in the portmancardin act. If we can move that forward we can make a difference. The other one is reducing the time from three years been to two years, even when youre parttime work can start saving. Thats important and we are extremely supportive of. Other individuals that have response to that as well for that parttime working or that person just Getting Started for saving . Senator lankford, yes, if you dont mind id like to respond to that also. We support the entirety of the portmancardin bill and that the provision i believe in my experience is something thats going to be very important for parttime employees. Both because it offers them act, but also because it does a great job of threading the needle on not having too much of an impact on the expense of the employer. So we perform we support that provision. Thank you for that. Any other responses to that. For the parttime worker just Getting Started for Retirement Savings. All right. Thank you, mr. Chairman, i appreciate your indulgence and our conversation about the correct osu and i appreciate you all holding the hearing. Its extremely important to us. Not at all. Im glad we have you outnumbered 21 today at least. Thank you, senator lankford. Senator carden. Sen. Cardin thank you, mr. Chairman and first, i really do want to thank you and senator brown for conducting this hearing. Senator portman and i have been working on pension issues since we were in the house of representatives so its really gratifying to have this hearing where we can explore going to the next plateau on pension reform. And to senator brown, we really do need to deal with the multiemployee issues. I know its not the subject for todays hearing, but i thank you for your leadership on that critically important issue. There are many provisions in the Portman Cardin bill, but i want to follow up on senator lankfords point. And that is and one of the , challenges is getting the younger workers to get engaged in savings. Some are parttime workers, so therefore, expanding eligible for parttime workers will help in offering them an opportunity to start saving for retirement at an earlier age. And many of those work for Small Companies that do not have pension plans. And by offering additional incentives for Small Businesses to set up plans will mean well have more workers participating in plans and again, a lot of these are younger workers that today dont have that opportunity. And although its extremely important that the tax deferral concept of saving for retirement, we find the most effective way to get younger people engaged in savings for retirement is when theres a match. If that match comes from an employer, very few people want to leave money on the table. Very few workers want to leave money on the table, but if the employer doesnt offer the plan, theres not a match unless they qualify for the savers credit and its been a godsend getting younger people engaged as we can see our federal plan on savings, on the thrift savings plan. So, my question is to i believe it was brought up, but i think others did as well. We have a provision in portmancarden with a savings account. A refundable savers credit going directly into Retirement Savings account. I want your view how effective you think that would be in getting younger workers and lower wage workers to participate more in Retirement Savings, particularly at a younger age . Ill address that quickly and maybe others can weigh in if we have time. I think what you and your colleagues have done in that bill to propose making the savers credit refundable is one of the most important things we can do. Right now, the savers credit , while wellintentioned and helping a lot of folks, and misses the people who probably need it the most and need the most help savings, anything week anything we can do to boost them up, to give them a shot, to have a safer and secure retirement is critically important, and i i Hope Congress will look at that piece of it to help lower income people as soon as possible. Mr. Chairman, i wanted to highlight that because i know thats an area that we are going to have further debate in our committee and i do think it is a measure that can have a major impact on reaching a population today that are just not saving for retirement at early enough age and i know the other members want to ask questions and ive had opportunities to talk to many of the people in this panel about our bill, but once again, senator portman, thank you for your partnership and leadership on these issues and i thank all our panelists. Thank you, senator cardin. And i want to talk about that and so much that helps in this bill to both deal with the Small Business issue and deal with the specific issue of lower inmany lower income and parttime workers who are not currently accessing plans and therefore, not saving. With that, we have votes that have started, im going to continue to chair until senator young is ready to spell me. He said he wanted to do that so lets move on to senator danes and senator young, if youre on, can you let me know and ill run out and vote. Senator portman, just so you know, this is senator young, im indeed here and happy to relieve you whenever you might want to go vote. Great, you have the gavel and lets turn to senator danes. Senator danes. Next we have senator casey, senator cortez masto and you can go in that order. Do we have senator danes . If not senator casey if present. We are in the middle of votes, so its understandable that some of my colleagues are not currently present. Senator cortez masto, are you present . I am here, senator young, thank you. Thank you. And lets me stay thank you to senators portman and Ranking Member brown for this great conversation and needed conversation and to my colleagues as well for their legislation in this space. Can i i know we are going to talk about this later, but im interested in the refundable savers credit and mr. Kreps. I want to address it this way. I come from nevada, weve been so hard hit, there are 60,000 fewer las vegas workers, and the bottom line there are too many nevadans who arent able to put away for retirement. Im curious if we have people who spent down their Retirement Savings from covid. How do we help them catch up . Is the refundable savers credit the answer to that . I would be curious to get your thoughts. Thats a very good question. I think that the refundable savers credit would help people catch up. Its effectively a support support for savings that matches their contribution so that would be incredibly helpful for them, but in the larger context, we have relied in part on addressing the pandemic through allowing people to tap their retirement accounts and thats fine and that helps a lot of people, but at the same point, it highlights that maybe we dont have the strongest support system for folks suffering out there and they were not prepared to address the pandemic in the way we should have been, and the retirement system, by itself, cant address all of these problems. We have to think bigger and in a broader context. And i appreciate that. And thats my concern. And thats why we have put so much money in other areas to support individuals from direct payments, unemployment insurance, to help them with their rent, to help them with food insecurity. Theres so much that needs to be done right now. This brings me to the next question and maybe mr. Stevenson, i would like your thoughts because i believe youre the one that identified theres about 20 or about 900 Million Dollars in covid related withdrawals that you have seen, is that correct . Thats correct. And thats out of our plans, yes. Just out of your plans. Im curious because during this pandemic, theres so much need right now. Shouldnt that be higher . I mean, given the fact that we have provided opportunities through the cares act and the heroes act for so many to draw down or take advantage of their retirement accounts because of the lack of income coming in, that doesnt seem as high. I mean, im curious, and im going to open it up to all of you. Is that a reflection of maybe they dont have retirement accounts . Or theyre unwilling to draw down on their retirement accounts . My concern is that they dont have retirement accounts or the Emergency Assistance they even need. So im curious on your thoughts on that. Thank you for that. As that relates to the 150 billion that we have. Its about 20 of the total withdrawals, the people normally would take 20 of their covid related so we thought that was quite high. While we were encouraged by that, its that more people hadnt didnt need to tap into it. Its 100 voluntary and we made it available and that that provision was there. So we were encouraged that we were in better shape than we might have thought going into it and they didnt need to tap into those at greater rates. Anyone else, any other perspective based on your experience . On the sector experience and with we found we had about 5050 with that provision. We didnt see a whole lot of use of it, but it did disproportionately impact our Health Care Workers and first responders. Who needed it the most and impacted the most, but also a lot of focus on education because thats the time value of money and any withdrawal you take right now, 10, 20 years, 1000 now, 5,000 now, and in 20 years that could have been 10,000. A lot of education was focused on that. Having more access to Retirement Plans and more people enrolled in Retirement Plans and thats a lot of downstream. Yeah, thank you. Let me also add my support for the auto portability. I think thats so necessary, i mean, i think anybody who has been in the work force would appreciate that opportunity. Mr. Kreps, i only have so much time left, can you speak to how that might impact someone who is facing a longer gap in between jobs . The real benefit is when they have the gap of jobs. Her theyre at higher risk of as they move from job to job, they can follow them on and on a medic basis. Rather than what they do now often cashing out their savings and paying the taxes and penalties, theyll maintain the savings over the course of their career. Theyll build more and more personal wealth and hopefully be able to retire with some dignity. Thank you. I appreciate that. I know my time is up. Ill submit my questions for the record and gentlemen, thank you so much for the conversation this morning. Thank you, senator cortez masto. Well, senator portman will run and i believe will be accepting the gavel once again momentarily, but i have some questions for our witnesses. I really thank you for all of your good work and i commend my colleagues senator portman and senator cardin for their effort to kick start this discussion with respect to Retirement Security with their Retirement Security and savings act and for holding this hearing today. As we look to lay the groundwork for what we hope will be another bipartisan retirement bill Success Story in the next congress. The ongoing pandemic is causing a multitude of problems for hoosiers from unemployment, to Remote Learning challenges, to sadly illness and death among family and friends. Im hopeful well reach a bipartisan deal in the coming days in a relief package that will help to address some of these immediate challenges, but im also mindful of the longterm ramifications of the pandemic in a host of areas and including Retirement Security. I want to ask a question of mr. Stevenson, sir. In your testimony you noted the , work that nationwide has undertaken to support workers during this pandemic and the cares act. Could you update us on how youve implemented the cares act to support workers through coronavirus related distributions and other provisions of the law . Mr. Stevenson . Thank you, senator young. The cares act was really, as you know, we all know, a very important piece of legislation to support our workers and nationwide has our goal was to make sure that was easy and accessible. When the volatility in the markets first hit we saw incredible amount of phone calls and people calling in, checking on their balances. We made sure we had people and technology to answer those questions quickly and efficiently and deliver the right kinds of content to help people remain calm so they didnt make the mistake so many do, selling when its low and buying when its high. We delivered more and more education and work shops and engaging with the participant. A piece that was really important is our partnership with our client. The Small Businesses owners the Government Entities, their voice is even more important than our voice. As we partner with them to tell the story, theres so much credibility there with the participant that helped them make the right decision. And the other part that we moved quickly on, i referenced a little bit earlier. One of the greatest things that happens during the volatility is, participants dont know how to react. So people have saved sometimes 100,000, 200,000, a Million Dollars and they can really blow that quickly. So theyre allowing us to be able to deliver annuities or in plan guarantees inside of a Retirement Plan, an efficient delivery vehicle and we manage the volatility, just like a target based fund, participants start saving in that and professionals take over, same way now with this capability. We will manage that process all the way through retirement into income and really help participants be much better prepared to live in a retirement after theyve worked for 20 or 30 years to save so much to work so hard to save so much much. Thank you very much. Sounds like youve really played an Important Role to help your clients through this crisis. Mr. Barr, in your testimony, you mentioned a new study that found the pandemic has altered the retirement timing of nearly 68 million americans, with most of those planning to retire later. In addition, about 20 million americans have paused their contributions to Retirement Savings during uncertain times. What do you see is the longterm impact of the changes and could you elaborate on the proposals you think would be for americans would be most effective at incentivizing saving or making up for the lost time . Thank you senator young for the great question. Its pressing and an ideal issue is an issue that i deal with every day. To be frank not just with covid. , covid is a sudden change, covid is a sudden change thats altered with the studies point point of view 20 million have , stopped making contributions, but folks do sudden changes all the time. They change jobs. I have clients who are in the middle of whats known as the sandwich generation, theyre taking care of children and grandchildren and theyre taking care of elderly parents. So there are lots of circumstances in ones life that cause a sudden change. The provisions that the portmancardin legislation will have a huge impact on all of those things, a, any opportunities that most of my clients to put money away and most of my clients do when they can and that helps Retirement Savings on the way in. Catching up at age 60, that provision in the portmancardin legislation is also something im certain many of my clients are going to take advantage of because there are times in their life when they dont have the opportunity to put as much away as they normally would. And they would later in life. And then finally, a provision thats very near and dear to me, that the biggest fear that every client has, is running out of money and becoming a burden. We think the provision that increases the required minimum distribution age to 75 attacks the problem from the back end at distribution time. Thank you so much. My final question is directed at mr. Luskin, i want to thank for your service, sir, to thousands of hoosiers who serve in the Public Sector in the great state of indiana and rely on the funds you help to oversee for their retirement. As you noted in your testimony, the average employee starts saving for retirement at age 32. Many of them accumulated significant Student Loan Debt and you indicated that debt has an impact on their ability to participate in an employer sponsored Retirement Plan. What can we do to address Student Loan Debt while also encouraging younger workers to begin saving for retirement earlier in their careers . Thank you for the question, senator young. And because i am representing a few of the provisions that weve approved, i wont go into too much detail as far as with the loans so i do a student loan, so i do apologize, but i think one of the points you made up, a great point for your question for your conversation with the other witnesses have to do as you look at the retirement, the hoosiers you support, starts out making sure that people are participating and as you get to the end of that retirement cycle, it has to do with what is your balance and how are you able to go ahead and break that down to replacement income. So, were looking at those two book ends, but during their whole career, as you mentioned, most employees, their career, they need to be able to make choices to either invest in their retirement or pay off their Student Loan Debt and i have to go back to, making it obvious, ive been raised by educators and providing education to them to allow them to make the best decision becomes very important regardless to what is the option. Well, thank you so much, sir. Its my understanding, senator portman has returned and if indeed thats the case, i will thats the case. Ill be handing the gavel back to you. You have the con, as we say in the navy. Excellent, i appreciate handling it and i think you did a superb job in handling this delicate responsibility. Good questions. I think we have senator whitehouse next if youre with us, senator whitehouse. Sen. Whitehouse i am here with you. All right. I thank you and senator cardin, senator brown very much. The problem of where you set defaults when people are making choices is an important question. If im not mistaken, a psychologist won the nobel prize in economics a couple of years ago for his work on choice and where defaults are set and how people make choices. Now, i have what we call the auto ira bill, which sets the default that employees are automatically enrolled in their ira plan unless they opt out, as opposed to automatically not enrolled in their ira plan unless they opt in. The employee retains full choice. Its a question where the default is set. It exempts smaller businesses and businesses in states that already have a Similar Program operating at the state level. And i think its one way to address the problem of having 25 of nonretiree adults having no Retirement Savings or pension at all, and only 55 of workers participating in employer sponsored Retirement Plans when they have them. So i would like to ask let me ask mr. Kreps, do you believe that an auto enrollment ira program would help in that circumstance . And specifically, are there elements that weve learned from the successful state auto enrollment ira programs that if we were to spread one across the federal system, we should use as models . Well, thanks for that question. Clearly, and for your leadership on this issue. Clearly if we had a National Requirement that employers either provide a plan or automatically enroll their employees in a savings program, more people would save. Theres really no question about that. Where we set the defaults matters, as you said, and we can look to what theyre doing in oregon, illinois, california, elsewhere, to fine tune it at the federal level if we go that direction to make it the most effective, but theres no question that that would get more people saving. And it leaves the employee with complete freedom of choice if they want one or the other. Anybody who feels strongly which way to go can make their own decision. Its not taking choice away from anybody, its just following this Choice Theory problem and setting the default in a way that signals people to their own best interest. Completely agree. Thats the one point i wanted to raise and i look forward to having that default setting question be a part of the conversation as we move forward with portmancardin. Thanks very much. Thank you, senator whitehouse. And let me say to the panelists, and those that light be tuning that might be tuning in, we had a great turnout of senators today. Some had to go vote or go to other hearings, but we had to pass over senator bennett if hes now with us, id ask him to speak up. Senator danes, hes not with us. Well, to both of them, thank you for being on the hearing call and listening and to all of my colleagues, thanks for participating. As i said, im here until the bitter end so im going to ask a few more questions, many of which are questions that have been touched on, but i think we need a little deeper dive. The first issue that i mentioned earlier was the fact that we dont have adequate savings among low income and parttime workers. These are people who are working, and yet, they are not saving. And i think its important that the bill lowers the number of hours that someone has to work before they qualify to be in saving and Retirement Plan, that was improved by the secure act, by the way, we take it to the next level. A lot of workers have parttime jobs and particularly women work parttime raising their kids and thats particularly true during the pandemic to address that concern, how does this address the covid19 reality . Being as expensive as it is parttime jobs, all they can do , when the schools are closed. I think thats a great opportunity. The matching thresholds being increased for those workers is also important and something that ought to be emphasized as we give employers the opportunity to increase the match so those individuals can save money more quickly and build up their nest egg. Only 25 of low income workers are saving and weve heard that over time. Some say 22 and whatever the number is, its too low and the Savings Credit being made refundable will help there. By the way, again, ive got some colleagues on my side of the aisle who expressed concerns about this. I do think that the savers credit has worked well, but its sort of run into a roadblock in terms of its ability to help people. That i think can be answered through refundability and were careful about it. The money goes into a retirement account, as an example, which i think is very important. Its not easy to administer that, but i think its very important that it go into retirement. I would also say im excited about this provision that would allow recent graduates to receive matching retirement contributions from their employers, if they have student debt to be paid off. Again, this goes to a lot of these lower income and parttime workers, too. If theyve got some debt and as weve said earlier, by mr. Stevenson, some are in their 30s and 40s and theyve got this debt still hanging over them. It makes it hard for them to save for retirement and its a National Problem and here we have a partial solution. The Small Business issue we talked about a lot today and i appreciate, again, the help weve gotten over time from the Small Business community as to what would make it easier for them to have a plan and auto enrollment to encourage employees to save for retirement is very important and you know, that was one of our previous reforms and were excited about the difference it makes. If youre a plan that has 70 of participation, and goes to about 95 . Senator white house just talked about that in relationship to his bill, but hes correct in the sense where theres an auto enrollment option people dont have to make the decision. So i think that were helpful there because for Small Businesses, that can be expensive. In fact, just starting a plan can be expensive and start up for Small Businesses and put the auto enrollment in place and put a plan in place and making it more Cost Effective for them. And those who are at or near retirement, again, data is i think only 55 of baby boomers are close to being prepared for their retirement and again, a lot of those good people are living longer and havent been able to save enough. Others have saved virtually nothing, but i think its critical for that person who maybe couldnt save as much money when they were younger, paying off college debt, for instance, or saving for their kids to go to college. And now, they have the opportunity, later in their career, to be able to put some more money aside. And thats why we have the catchup contribution for people 60 and up. And we also think its important to help manage that retirement. So going from the 75, we think, is really important for the minimum required distribution. My dad was working into his 70s and he would always complain to me why he had to take his money out and pay taxes on it while he was still working well into his 70s and unfortunately with this pandemic more and more people are finding themselves in a situation where theyve got to work longer, longer hours and more years in order to just sort of stay up. So, i think its particularly helpful now and i appreciate what you all have said about those provisions. Anyway, those are some of the things that we had a chance to talk about today and i think its very, very important. On auto enrollment, that goes back to a bill introduced in 1999 with senator cardin and myself and this next generation of auto enrollment and legislation i think will help. It allows employers to increase the initial default contribution from 3 to 6 and then gradually increase the default rate to 10 of pay over time. Can anyone share views on that . I might start with you, mr. Stevenson because i know you have interest in this, but do you think that will be helpful . X without question, thank you chairman. And quite frankly, all of the provisions that you just ran through, we wholeheartedly support and auto enrollment in particular. Auto enrollment and auto escalation, i think those are both real important and one of the things that we dont talk enough about is just the pattern that creates. Once people get started they get in that habit and they see that balance grow, theyre glad they did. And one thing i would point to, we hear this all the time, especially from firefighters and police where theres a strong sisterhood, brotherhood, once somebody gets you in the plan and they keep contributing and so glad they did and thats what we do with auto enroll and auto escalate is where youre making that more systemic and getting people in those plans. So, anything that we can do to support that we will and weve seen Great Success with that on the corporate side where companies apply that without it being legislated and anything we can do. We are with you. Thank you, again, youre in the trenches with this every day and getting more incentive helps. On the catchup contribution and anybody can jump in here, the current bill would have a catchup. 10,000 first versus age 60. How would that help people get a more secure retirement . Maybe you could talk about that a little bit. Thank you senator portman, id be happy to answer that question. First, let me say, i really do want to thank you and senator cardin for your incredible work on this bill. Supporting every provision of it. Its a very needed piece of legislation and it really hits the mark, hits the target that people need to be incentivized to save more. The catchup contribution, in my opinion, the increasing the rmd to age 75. All of those provisions, if somebody had the opportunity to save more money, its my experience that they do. Its also my experience that with the increasing requirement on distribution age you mentioned your father earlier, in your comments, i had that excuse me, i had that situation happen frequently in my office as well. And having people allow their money to compound over time by contributing and by educating them to do so and by allowing people a little bit of extra time at the end to take care of themselves, their number one concern is that they become a burden to their families, to their friends, to their community, and these provisions, i think, help with that. So, we applaud your efforts and thank you. Im, again, happy that weve made some progress for Small Businesses. We talked about that earlier. Mr. Kreps. You may want to talk about this. But the simple plan that we proposed back in, i think it was enacted in 1996, has been helpful. Small business startup credit was established in 2001. I think weve done some things to help on simple plans and on startup credits and helped with Small Businesses, but still, we have these numbers that are inescapably discouraging. That many Small Businesses are not offering plans. Mr. Kreps, i want you to start, but also, mr. Barr, you have a strong view on this. It talk to us about what we should do with regard to Small Businesses and particularly simple plans dont permit employees to make roth contributions now which i always thought was a mistake, all over plans permit is, 401 k s, 403bs, so id like to give small employers the option including the roth option. Is there any reason not to do that . Can you comment on that . I cant think of not giving a roth option. In the larger context, when we look at the uncovered work force for those who dont have access to a plan. A lot of them are employees of Small Businesses and i im sympathetic to a Small Business owner who doesnt have the time or energy to go through the complicated process sometimes as establishing and running a 401 k plan. Anything we can do to incentivize them to take the steps, to make the economics work better through credits, to give them more options, is great. That will help expand coverage. Thank you. Any other thoughts on that . And then i want to go to mr. Mr. Luskin for a question. Any others . Mr. Luskin, i want to ask you to take a look at one provision, its the nonspousal assets being able to be enrolled into a plan. Can you talk about that and how that might affect some of the beneficiaries you serve . Absolutely. And thank you for the question, senator. When it comes to rolling over nonspousal consolidation. And the more that opens you up to lowering costs and allows them to take part in better returns, because incentives and paying for good Investment Advice and so forth is important, but lowering those allows that to have better returns and to build up their balances more and so what were trying to do is give people the opportunity to consolidate their accounts, which allows them to align their asset allocations to have financial plans that will provide them with better opportunities to be environment to be retirement ready. I apologize for them to be reiterating, at the end of the day when youre getting ready to retire, you need to convert that balance into an income, the lower income you make, the higher your replacement income needs to be. So consolidating assets gives you a lot of advantages, when it comes not just to your plans, but lowering the administrative costs to make sure that the balances can grow. Thats what were looking to support is providing that ability. Ok. Let me follow on that for a minute. And one of the ways to give plans flexibility they need to ensure, you can get the most gain out of your investment might be these collective Investment Trust provisions. Can you talk about that . I think in your Opening Statement, it was written, you talked about how this will save plans significant amount. I think you said a total of a billion dollars. Can you talk a little about the collective Investments Trust provision and how that might be helpful . Absolutely. Thank you for the opportunity. I had the privilege of being raised by educators and understand the population being impacted, so thank you for that. Essentially the crux of the argument is we want to provide 43b participants with the same advantages that other participants have. Once again, having an open market is important and a lot depends on advanced metrics where you have access to annuity contracts and mutual funds. What were looking to is larger plans that have access to the cits not only does it give them lower fees, but it gives them the opportunity to have flexibility, customize investment options, mitigate potential downside risk. So providing that vehicle and that option, for the specific plan sponsor should be something that you provided. On the other side the coin. Its always important to look at the other side of the coin, i cant think of a single reason why we would not want to provide that option for them. And especially the people who work so hard dedicated to the public and our communities. Well, good. Here is another one that we havent talked about today is exempting roth assets in a plan from the required minimum distribution rules and i think that that also helps your beneficiaries. And i dont know if you and maybe mr. Barr want to comment on that and thats had a provision in this bill that hasnt gotten much attention. I agree. Would you like to go first . In truth, thats a provision that i am not as familiar with, so ill defer to you, mr. Luskin, thank you. Thank you. Right now traditional buyer rates are exempt from r dmd. And consolidation to the point one of the biggest consolidations about that is to the point of people nearing retirement age is maintaining the large balances. Right now iras are not required to have an rmd on the roth accounts, but Plan Sponsors and government Retirement Plans are, so what were simply looking to do is provide our government participants who work so hard the same benefits that the iras are providing. So were just looking to even the field. And mr. Barr, i know how strong you feel about rmds, i was giving you a chance to talk generally with rmds. There are a lot of provisions in this bill that will affect peoples lives. As i said at the outset this is , about peace of mind in retirement and mr. Kreps talked about the golden years, oh, my gosh, im outliving my savings and i dont want to be a burden on my family or others. So, everything in this bill, i think, is directed toward that in one way or another. I see that mr. Danes has now joined us. If youd like to ask questions of the audience, of the witnesses, that would be great. Thank you, mr. Chairman. Im really glad youre holding this hearing. Its an important issue of Retirement Security. You think about how many americans, how many montanans work hard, they save for decades hopeful of achieving a retirement. And ive listened back and forth to the conversation where folks dont have to worry about outliving that savings and how do we promote personal responsibility as relates to saving more money so they can do that on their own and not relying on somebody else. Its so important, we have found, that people who are in the workplace today are aware of how much they need save to achieve their desired retirement and make sure they dont make any significant errors, mistakes along the way. One easy thing that congress could do and chairman portman, thanks for mentioning this bill that im working on with senator warren, and that is helping future retirees with this, we call it Retirement Savings lost and found acts. If we dug into this issue, we found, first of all, americans, by no surprise, are switching jobs at a higher rate than ever before. But theyre unknowingly leaving behind 401 k balances. In fact, there was a study from a major Investment Management company that showed up to 30 have employees left behind some Retirement Savings when they switch jobs. Nearly one in three. So this bipartisan bill i have with senator warren will solve this problem and make sure that people get that money by creating a national lost and found registry for retirement accounts. One place to go and find this information and using data that , the employers are already required to report. And using this, employees can find the employer sponsored retirement accounts in one easy location online. It would be a big help for employers, who often spend a lot of time, a lot of hours reuniting employees with their lost accounts. This would be for montana workers and i would like to see it passed into law. I just want to highlight that as a piece of legislation, i think that would be a pretty common sense step for building accounts. I have a question for the panel with that kind of introduction. Would you agree creating a Retirement Savings lost and found registry would be helpful to reunite workers and retirees with their missing retirement accounts . Whoever off the panel wants to jump in. Senator daines, thanks for joining us. We certainly support that, that piece of legislation that youve discussed and outlined, and the other part, i think, thats also important is everything we can do to strengthen beneficiaries, making sure that the plans have clear beneficiaries on them and helps with tracking that down. Youre right, theyve earned it, theyve worked hard and that money should follow them wherever they go. Great, thanks, mr. Stevenson. Somebody else . Senator daines, i would also like to echo what mr. Stevenson just said. Its an important piece of legislation and one part of that legislation that i particularly like is that its forward looking and that not only does it form this registry, but then has the ability for the administrator of this program to basically work with the private sector to actively try and find people who have missing accounts and thats an important thing. Yeah. Senator daines . As somebody who has spent time as somebody who has spent time helping clients do just that, i agree that it does address a critically important issue for lots of americans and i extend the offer that our firm would be happy to help you in any way that we can. Appreciate it. Wed have you review the bill and make sure weve got it right and any feedback before we have a hearing on it and were parent to four children, children have graduated college and started their own careers and have their 401 k accounts and they have those dad and mom moments helping your kids settings them up and telling them to maximize it with the match and so forth, but also as we all know here, the importance of starting early, how big an effect that has longterm on growth of the savings accounts, one way to make sure you dont lose that early investment which of course turns out to be a big number as you move through life. Well, i want to ask another question here regarding personal Savings Rates. One of the trends that surprised us. We were doing some investigation about whats happening with Savings Rates during the pandemic. Weve seen a big jump in the personal savings rate. In fact, the personal savings rate, the date that that weve collected went from 7. 6 in january to north of 33 in april. Now, as of october, weve seen this personal rate decreased to 13. 6 , but its definitely moving up, which we think is actually a healthy thing for longterm retirement. Here is my question for the whole panel. When things get back to normal and i was at the president s vaccine summit yesterday at the white house, im encouraged by the direction were headed here and we may have some very good news here, kind of a Christmas Present for the nation with these vaccines, but when things are back to normal on the other side of pandemic. What would you say is the ideal personal savings rate and how can we make sure that folks at all income levels are saving enough . Daines, you, senator for the question. Its very dependent on a few factors. Depending on if your plan is supplemental versus primary. Savings rate of 3 we are used to hearing. 401 k me out when the started to come out. The higher percentage you need is dependent on if it is a primary or supplemental. A lot of the research that was done points to double digit contributions. There is a lot of benefits. Helping participants get to those rates helps satisfy income, because there is so much based on independent needs. Anyone else . I would just reiterate i think that the point that mr. Luskin made that we think that number, depending on what else you have. What is your Social Security . Do you have access to a pension . If it is your only savings vehicle, that number does need to be double digits and greater, kind of temper sent15 kind of temper sent15 . 10 15 . Anybody else . Chairman, i will toss it back to you. Back and forth. With some of the witnesses about the fact that one of our challenges in our system right now is that people are moving jobs more frequently and sometimes losing savings, which may be relatively small, but it adds up when youve got several plans, which is not unusual for the generation of your kids and my kids particularly, as they move from job to job. I will say on the personal savings rate, just to throw this in. We talked earlier about the kshaped recovery, my sense from talking to some of the experts on this is the reason the personal savings rate got so high was that some people were saving more who could afford to and particularly, you know, with the stock market doing as well as it was and continues to, that, you know, higher income individuals were able to save more and a lot of middle income workers as well, but unfortunately it wasnt as you indicated in your comment, senator daines, at all income levels. You want to see that kind of savings and our focus here today has been a lot about the parttime worker, the worker in the Small Business. The low income worker which is where the huge opportunity is because theyre not saving. Senator daines worked for the Procter Gamble company in his distinguished career and they had a great savings plan and you know, in effect, their Profit Sharing plan and 401 k plan together means that people are given great opportunities. My dad worked there when he was a young man for a couple of years and he loved the idea that Procter Gamble, and when he started his own Small Business with five people, he started a Profit Sharing plan like Procter Gamble. And unfortunately lost money the first three years and people didnt get much in the Profit Sharing plan, but he started a 401 k as soon as we could and there are guys who turned a wrench, he told forklift trucks, guys my age, ive known virtually my whole life, are retiring with a nest egg. And i ran into one and hes using it to help his grandchild go to college. They took advantage of it. Now, theyve got 300,000, 400,000, 500,000 dollars coming to them hopefully spread over time it really works, and that is what is exciting. Experience in big business and Small Businesses. So we look forward to working with you on your proposal. In a sense, i think youve had a hearing on it today and hope we can get it into legislation soon. With that, i want to thank the witnesses. You guys were very helpful today and youre the experts and we want to continue to stay in touch with you. We need your views as we put this together. Mr. Chairman . Yes. Oh, senator carper, thank goodness you spoke up. Let me do this, if you please. Ive got to run to vote and ill turn it over to you or senator daines. You have the gavel in that case. Ive got to run and go vote and im come back and i may miss the vote if i dont go now. For any members who have written questions for the record submit those by close of business on wednesday, december 16th and for our witnesses, again, if you have additional written comments, please provide them. Everything that was in writing is part of the record, but feel free to add to that. With that, im going to turn the gavel over to senator carper, who will formally adjourn this hearing. Thank you, my chairman. Thank you, mr. Chairman. Welcome one and all. The senator knows i spent formative years in my life in ohio in columbus. My dad was a claims adjuster and ended up in the home office in columbus, training for claims adjusters all over the nation in america. And mr. Stevenson, i think youre with nationwide, is that correct . Yes, sir, thats correct. Thats good. Theres a great movie out this last year i think nominated for an Academy Award and the name of it was just mercy and it focuses on the life of an africanamerican attorney who grew up in the rural south and actually grew up in southern delaware and has spent most of his life trying to make sure that justice was provided for people of color, as they went navigated through the criminal justice system. You are a dead ringer for him. Youre literally a dead ringer for him. I turned on the mic and i thought what is Brian Stevenson doing on. And we share a last name, which is interesting. And we share a last name, which is interesting. Great guy. Great guy. Great movie and great book. Who is from zanesville on that. I am, scott barr from zanesville. Thats great. I have a stepson whos lifes work is helping people make investments for security for Retirement Security up near north of detroit and very much, very proud of him and what he does. So, its i have all kinds of interest in this hearing. Used to be state treasurer in 2009, we had the worst Credit Rating and the pension fund and not a pension fund and not a dime. And we had a deterred Compensation Program that was a tragedy, it was just such a screwed up mess. And we were able to work with great governors, pete dupont and others to straighten it out and something that we could be proud of. I have a question for mike kreps and this actually focuses on helping low income and nontraditional workers save for retirement. Mr. Kreps, and ive been going back and forth voting for hearings. I was a little confused, in your Opening Statement you raised proposals by my colleagues aimed at helping low and moderate income people save for retirement and i reminded in the new testament looking out for the least of these and i think when you quote me on and on and on, it doesnt say anything about when i was a low income person and didnt have much money, did you help me save for retirement . And i think theres more imperative at play here. The related challenge in this space, most people dont think about Retirement Savings until later in life at a particular inception point, maybe getting a new job and tax time is one Inflection Point that might be particularly helpful to leverage for low income and maybe nontraditional workers. Here is an example out of delaware. Delawares volunteer income tax assistance operator piloted to a local institution where they can sign up for an ira and mr. Kreps, let me just ask. How should congress, maybe the Incoming Biden Administration think about better leveraging Inflection Points in Public Private partnerships to encourage Retirement Savings particularly amongst lower income and nontraditional workers . Again, its a great question. And we have youre right, we have decades of economic and Industry Research showing very clearly that we could help people and encourage them to save if we hit them at Inflection Points when theyre thinking longterm about retirement. Birthdays, starting a new job, marriages, divorces, deaths in the family, things where they have to think longterm. And i think we can, congress, the biden administration, folks in industry can think a little more creatively about how we can partner together to do things. Imagine if every time you got a tax refund, you file your taxes and a window popped up and said would you like to put part of that towards Retirement Savings . Or there was a more National Push to get people using the savers credit or more of a National Push to get people to save. I think theres a lot of room to work there, particularly through publicprivate partnerships, to do the education, to do the kind of pushing on folks, to nudge them in the right direction when theyre busy and theyre not going to think about retirement 24 hours a day like some of us in this hearing. Good, thank you. Any other panelists want to comment on that, please . Thanks for your responses. Anybody else . I would, senator, i would add that while using Inflection Points is helpful, just what ive seen over time and what the data continues to suggest is that the auto features are even more impactful. We have to really, excuse me, the auto features are key. The savers credit, expanding that, and things more standard to the people dont have to have choice, and i think that will help them and once they see the balance and then theyre hooked and thats an important way to go. To your point on the auto feature. The we have the Thrift Savings Program for employees and a lot of people participate in that, as they should. We find that when folks before you had an auto signup feature, fewer than half of people, you know, began, joined the thrift savings plan and when they came and joined the federal work force. Once we moved the auto provisions over three quarters. And one of the opportunities in that federal thrift plan, even now, is to help those federal workers, now that theyre in the plan, how do we help them get out of just that safe account, that value and get into more of the equities, and thats the next opportunity and thats something in the right time we should have a conversation about. Thank you. All right. Anybody else . No . All right. Let me just see if i want to find out at least two of you can spell this word, ohio. [laughter] great to see you guys. Thanks so much. Thanks for what you do. Thanks for joining us today. Is anybody else . I think im the acting chair, is anybody else members or witnesses wish to comment . No . Going, going, gone. Thank you to all, happy holidays, thank you so much. Washington journal every day we take care of calls live on the air and we discussed policy issues that impact you. We are featuring our authors week series. Coming up this morning, Cheryl Atkinson talks about her book about how the news media taught us how to love censorship and hate journalism. And an author has the Lessons Learned from the polio vaccine. Journal liveton at 7 00 eastern and be sure to join the discussion with your phone calls and facebook comments, texts, and tweets. Coming up tonight on cspan at 8 00 p. M. A look at the political career of lamar alexander. Book year ende review starting with books on science starting with the origins and future of the cosmos. Cspan3, programs marking the 400th anniversary of the mayflowers trip starting with a discussion on the mayflower compact, the set of rules for selfgoverning by the settlers. That is tonight starting at 8 00 p. M. On the cspan networks. Barr announced criminal charges against an alleged bomb maker for his role in the 1988 bombing of pan am flight 103. In response to a question about the election, the attorney general says he does not see any basis for appointing a special counsel to investigate alleged Election Fraud and he would not appoint one. This is 35 minutes