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As retirement legislation continues to evolve in Congress, some lawmakers are hoping to address what they view as a persistent problem: lack of access to a workplace plan among low- and middle-income workers.
A bipartisan, bicameral group of lawmakers has started work on a bill to tackle just that. While legislation commonly known as Secure 2.0 includes proposals aimed at expanding both access and the ability to save, it won’t necessarily reach people whose company offers no plan, say advocates.
“If Secure 2.0 passes, we’ll still have a fundamental problem,” said John Lettieri, president and CEO of the Economic Innovation Group, which supports the congressional group’s goal.
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“”Let’s address where the biggest gap exists, which is in the bottom 50% [of the wealth distribution], where most workers don’t have access to an employer-sponsored plan and don’t benefit from current incentives to save,” Lettieri said.
An estimated 57 million workers have no retirement plan offered through their job, according to Georgetown University’s Center for Retirement Initiatives. And low-earning employees are far less likely to have one: Among those in the bottom 25% of wages, 42% have access to a workplace plan, compared with 88% in the highest 25% of wages, research from the U.S. Bureau of Labor Statistics shows.
The congressional group — which consists of Sens. John Hickenlooper, D-Colo., and Thom Tillis, R-N.C., and Reps. Terri Sewell, D-Ala., and Lloyd Smucker, R-Pa. — is exploring the idea of a program modeled after the federal Thrift Savings Plan, or TSP, according to people familiar with the group’s efforts. That’s the retirement plan available to federal employees, as well as members of Congress and the military.
The TSP includes some…
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