Legislation to Key in on Women’s Retirement Savings

September 2006

Senators Gordon Smith (R-OR), chairman of the Senate’s Special Committee on Aging, and Kent Conrad (D-ND), who together co-sponsored the Retirement Savings and Security Act of 2005, a bipartisan legislation to boost worker savings, are teaming up once again to encourage Americans, and women in particular, to save for retirement. The legislation, which is currently still in the drafting phase, places heavy emphasis on encouraging and educating women—who tend to live longer and earn less than men—to save.

Officials have said the proposed language of the pending legislation aims to help women better prepare for retirement through financial literacy education, more assistance with getting equitable imbursements during divorce, and additional retirement savings incentives.

Other suggestions for the proposed bill include

• setting guidelines that make certain deductions and credits available to an individual without regard to the spouses’ income;
• creating a product that would allow individuals who are contemplating time out of the work force to raise children or care for other family members, to put savings aside on a tax-deferred basis that they can draw from while they are not working or on leave; and,
• introducing a voluntary, tax-advantaged, savings vehicle for women only that would allow them to “catch up” on the difference in salary women typically miss out on compared to men.

“Because women face these unique obstacles in preparing for retirement, our government must do more to level the playing field“, Smith said in a press release. “We must work to allow every American an equal opportunity to be comfortable and secure in their golden years.”

Though the proposal is designed to address some of the circumstances generally experienced by women, it will not be limited to women.

ICMA-RC is monitoring this proposal and will keep you informed as we learn the specifics and how it might impact state and local government employees.