Lankford Advocates for Oklahomans To Save For Retirement While Offering Access to Funds for Emergencies
CLICK HERE to watch Lankford’s opening statement on YouTube.
CLICK HERE to watch Lankford’s opening statement on Rumble.
WASHINGTON, DC –Senator James Lankford (R-OK) provided opening remarks during a Senate Finance Committee markup of the Enhancing American Retirement Now (EARN) Act, also known as SECURE 2.0. The bill includes Lankford’s Enhancing Emergency and Retirement Savings Act, Improving Access to Retirement Savings Act and Military Spouses Retirement Security Act. The bill passed the committee unanimously.
The Enhancing Emergency and Retirement Savings Act of 2021 would help Oklahoma families save for retirement and prepare for emergencies. The legislation would also encourage participation in retirement plans by giving individuals additional flexibility and penalty-free access to funds should a family emergency hit. The legislation would provide a penalty-free “emergency distribution” option from employer-sponsored retirement accounts and IRAs. One emergency distribution would be permitted per calendar year, and that distribution would be limited to vested amounts over $1,000, with an annual maximum withdrawal of $1,000. Additionally, the legislation requires that the individual replenish the withdrawn amount back to the plan before an additional emergency distribution from that same plan is allowed. Together, this will provide flexibility while also ensuring that individuals continue to save for retirement.
The Military Spouses Retirement Security Act would help spouses of active duty service members save for retirement by expanding access to employer-sponsored retirement plans. Many American households struggle to save for their golden years. Spouses of active duty service members, however, face an additional hurdle to saving for retirement. According to the Department of Defense, about one-third of military service members experience a permanent change of station move every year. When service members move, their spouses often relocate with them, putting their own careers on hold.
The Improving Access to Retirement Savings Act will allow more organizations to participate in multiple employer plans (MEPs) by allowing 403(b) plans, which are prevalent among tax-exempt organizations, to participate. It also clarifies that small employers that join an MEP may take the small employer pension plan start-up credit for their first three years in an MEP, regardless of how long the MEP has been in existence. It also allows a grace period to correct reasonable errors in administering automatic enrollment and escalation features when groups are enrolling in an MEP, provided they are corrected within nine and a half months of the end of the year in which the mistakes were made. Finally, it would provide employers additional time to make retroactive plan amendments that increase benefits for employees.
Transcript from Opening Statement
Mr. Chairman, Ranking Member, thank you for all the hard work of all your staff and your team. There’s a lot that has gone on behind the scenes on this to be able to help negotiate and navigate a lot of very complicated and technical language. I do appreciate the work of the teams and how well our staffs have worked together on these issues.
Retirement should not be a partisan issue. That is all Americans are trying to work towards a secure retirement. So, that’s a positive thing for us to be able to work together on it. One of the things I’ve been working extensively for the past year is trying to help folks with lower incomes start saving for retirement. That is a group of Americans that are looking towards Social Security to be able to meet their retirement needs and we all know Social Security will not meet their full retirement needs. They’ve got to have something else as well, but for a lot of folks on the lower end of the income spectrum for them to set aside money into retirement means that money is locked away. They can’t get to it then in case of emergency. So, we’ve worked through the process of trying to help find a way to be able to help those individuals that can save for retirement—even a little bit also get access to some of those funds in case of an emergency without having a penalty.
So, this is something that Senator Bennet and I have worked on extensively. Our staffs have worked together extensively on. We’ve gotten a lot technical assistance from the Administration. We also have nine different investment and retirement groups that have done extensive work with their members on this and have also recommended it and stand behind it. Mr. Chairman, I’d like for these letters of recommendation to be available in the record.
The simple principle is this—can an individual setting aside money for retirement be able to get access to $1,000 of what they have vested into their retirement fund without having the penalty and then once they repay that back over a three year time period, in case they have another emergency, they could get to that again in case of that ‘panic moment’ for them. Only four in 10 Americans can come up with $1,000 right now in case of an emergency. So, car breaks, air conditioner breaks, a refrigerator goes out, kid ends up in the hospital, whatever it may be getting access to $1,000 makes an enormous difference for a lot of families. So this encourages those individuals to save for retirement and also allows them in case of emergency to get access to those funds without having a penalty but still incentivizes them to go put that money back in their retirement because they’re going to need that in the days ahead.
So, that’s what we’ve worked together. We’ve had great cooperation on this for Senator Bennet and I. And we are grateful that it is included in the base bill today, and I look forward to being able to support this and any other good ideas.