Statements on Introduced Bills and Joint Resolution

Floor Speech

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Ms. COLLINS. Mr. President, I rise to introduce two bipartisan bills that would help improve Americans' retirement security. Together, these bills would make it easier for more small employers to offer retirement plans and encourage employees to save more for their retirement.

There are many reasons why American households struggle to save for retirement, including the shift away from employer-based ``defined benefit'' plans and rising health care and long-term care costs. Longer life spans increase the risk of outliving retirement savings. The economic and health impacts of the COVID-19 crisis may also pose a threat to retirement security.

Increasing access to employer-sponsored retirement plans is one way to help improve the financial security of many Americans. According to the Georgetown University Center for Retirement Initiatives, nationwide only about 54 percent of private sector workers had access to a retirement plan through their employer in 2020. In Maine, the percentage is a bit higher; approximately 59 percent of private sector employees had access to a retirement plan at work. But that still leaves more than 200,000 employees without access to a plan.

In December 2019, provisions from my bipartisan Retirement Security Act were signed into law as part of the Setting Every Community Up for Retirement Enhancement or ``SECURE'' Act. These provisions will help to expand access to employer-provided retirement plans by reducing their cost and complexity, especially for small businesses. This law represents an important step forward, but more is needed.

Congress established SIMPLE (Savings Incentive Match Plan for Employees) retirement plans in 1996 to encourage small businesses to provide their employees with retirement plans. These plans are less costly and easier to navigate than traditional 401(k) plans and provide an alternative approach for employers to help their employees save for retirement.

The SIMPLE Plan Modernization Act, which I am introducing today with my colleague, Senator Mark Warner, would provide greater flexibility and access to employees and employers seeking to save for retirement by using SIMPLE plans.

This legislation would expand access to SIMPLE plans by increasing the contribution limit for most small businesses. In addition, the bill includes incentives to encourage small businesses to move from a SIMPLE plan to a 401(k) plan when they are able to make this change.

Like many Americans, spouses of active duty service members often face challenges when it comes to saving for retirement. Military spouses also face one hurdle that many others do not: frequent moves and changes in employment.

According to the Department of Defense, about one-third of military service members experience a permanent change of station move every year. When a service member moves, their spouse usually relocates with them. The military spouse may face periods of unemployment, where they are not able to participate in an employer-sponsored retirement plan. When they do find a new job, they often work part-time, despite seeking full-time work, or are only able to spend a few years with their employer before moving again. These factors often preclude them from being eligible to receive employer contributions to their retirement plan or from being fully vested in their plan.

The second bill I am introducing today focuses on helping to address this need by providing a tax credit to small employers who provide military spouses with accelerated eligibility for retirement plan participation, employer contributions, and vesting.

In particular, the Military Spouses Retirement Security Act, which I am introducing with my colleague Senator Maggie Hassan, would make small employers--those with up to 100 employees--eligible for a tax credit of up to $500 per year per military spouse. The credit would be available for three years per military spouse. The amount of the credit would be equal to $200 per military spouse, plus 100 percent of all employer contributions for that spouse, up to $300.

To receive the tax credit, small employers must make a military spouse immediately eligible for retirement plan participation within two months of hire. Upon plan eligibility, a military spouse must be eligible for any matching or non-elective contribution available to a similarly situated employee with at least two years of service, and must be 100 percent immediately vested in all employer contributions.

In light of the positive effects these bills would have on strengthening retirement security for millions of Americans, I urge my colleagues to support the SIMPLE Plan Modernization Act and the Military Spouses Retirement Security Act.

Thank you, Mr. President.

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