National Institute on Retirement Security Applauds SECURE 2.0 Legislation

Retirement Provisions Are a Step in Right Direction, But More Work Needed to Prioritize Low- and Middle-Income Workers

WASHINGTON, D.C., December 22, 2022 – SECURE 2.0 legislation that is expected to pass this week as part of the 2023 omnibus appropriations bill is a clear sign that Congress understands the urgent need to shore up the nation’s retirement infrastructure. The National Institute on Retirement Security (NIRS) applauds federal legislation that is expected to require auto-enrollment in new retirement plans, make the Saver’s Credit more accessible for low- and middle-income workers, improve access to retirement plans for part-time workers, and allow older workers to save more. Additionally, the bill is expected to enable employers to help younger workers struggling with student debt get started with saving for retirement.

“It’s encouraging that lawmakers are continuing to give retirement policy the attention it needs. We’re pleased to see provisions in SECURE 2.0 that will improve access to retirement programs and help more workers set aside savings. Far too many Americans face a frightening retirement shortfall,” said Dan Doonan, NIRS executive director

“There remains an urgent need to fix the gaping hole of about 57 million workers who lack access to a retirement plan at work. While this legislation will make significant progress, more work will be required to make retirement security a user-friendly proposition for all workers. Typically, low- and middle-income workers struggle the most. These workers often have no access to workplace retirement programs, are unlikely to save on their own, and benefit little from tax incentives that promote retirement savings,” Doonan said. “These are the Americans who should be our top priority, not high-income earners already on track for a secure retirement.”

Recent NIRS research, The Missing Middle: How Tax Incentives for Retirement Savings Leave Middle-Class Families Behind, documents how retirement policies fail to promote adequate retirement security for the middle class. The report also highlights the important role that the Saver’s Credit could play in encouraging savings. It is a positive development that the Saver’s Credit will be reworked, made refundable, and will permit funds to be deposited into retirement accounts like a workplace match.

Congressional efforts to empower employers to help younger workers save for retirement via the SECURE legislation is significant. Over the long-term, retirement is far more efficient when younger workers are saving early in their career and at higher levels.

NIRS research also finds that the burden of preparing for retirement is increasing as workers face more risk and rising costs. Escalating housing, healthcare, and long-term care costs in retirement are creating retirement obstacles for Americans. Meanwhile, the shift from pensions to 401(k) plans has pushed more retirement risk onto workers.

The National Institute on Retirement Security is a non-profit, non-partisan organization established to contribute to informed policymaking by fostering a deep understanding of the value of retirement security to employees, employers and the economy as a whole. Located in Washington, D.C., NIRS membership includes financial services firms, employee benefit plans, trade associations, and other retirement service providers. More information is available at Follow NIRS on Twitter @NIRSonline