Lankford’s Emergency Savings Bill a “No Brainer” for Congress to Pass in 2022 Says National Taxpayers Union
WASHINGTON, DC – Senator James Lankford (R-OK) today applauded the National Taxpayer Union (NTU) for listing his Enhancing Emergency and Retirement Savings Act on their list of "No Brainer" bills that Congress needs to pass as soon as possible in 2022. Lankford’s bill would help families save for retirement and prepare for emergencies by encouraging participation in retirement plans and giving individuals additional flexibility for penalty-free access to funds should a family emergency hit. Lankford provided remarks in support of his bill when it came before the Senate Finance Committee in June. The bill was included in the Senate Finance Committee’s broader retirement package, the Enhancing American Retirement Now (EARN) Act, which was approved unanimously by the Committee, 28-0.
“I agree with the National Taxpayers Union that this bill is a no-brainer for Congress to pass to encourage Americans to keep and use more of their hard-earned money when they need it,” said Lankford. “Oklahomans need confidence that they can access their own money from their retirement account if an emergency strikes their family, and that confidence will actually encourage them to save more for retirement in the first place. Providing access and the ability to pay back some retirement funds to cover an unexpected medical expense, broken appliance, or a car that needs maintenance will give many families in my state and around the country the breathing room they need to keep their families going.”
For more information on the NTU’s “No Brainer” list, CLICK HERE.
"Helping Americans save up for emergencies is a true policy No Brainer for Congress. That's why NTU is proud to include Senator Lankford's Enhancing Emergency and Retirement Savings Act in our 12th annual No Brainers list of bipartisan bills Congress should pass in 2022. NTU thanks Senator Lankford for his leadership on this pro-taxpayer and pro-consumer legislation,” said Andrew Lautz, Director of Federal Policy at NTU.
Background on the bill
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 bill is supported by the following groups:
“We believe this excellent legislation will give savers comfort that they’ll have access to their money in the event of an emergency and will remove a significant barrier for low- and middle-income workers to save for retirement in the first place. Most critically, the ability to access a small amount retirement savings without a tax penalty will help prevent many people from digging themselves into a financial hole due to an unplanned emergency expense, “ said Eric Stevenson, President, Nationwide Retirement Solutions. View the full letter HERE.
“The Enhancing Emergency and Retirement Savings Act smartly leverages the existing workplace-based retirement plan system to address this emergency savings problem while ensuring Americans continue to save for a secure retirement following an emergency. The legislation creates a new category of distribution in a 401(k) or similar plan that would allow workers who have a certain balance in these accounts to quickly access their savings to address a personal financial emergency without an additional tax penalty and a minimal amount of paperwork,” said Brian H. Graff, Esq. APM, Executive Director/CEO, American Retirement Association. View the full letter HERE.
“We are writing on behalf of the American Benefits Council to thank you for your leadership with respect to emergency savings and the introduction of the Enhancing Emergency and Retirement Savings Act of 2021. This bill reflects your commitment to good bipartisan retirement policy and responds to a critical need for financial protection in cases of unexpected expenses that often present real challenges for many American workers and their families,” said Lynn D. Dudley, Senior Vice President, Global Retirement and Compensation Policy, American Benefits Council. View the full letter HERE.
“The ERISA Industry Committee (ERIC) applauds the introduction of the Enhancing Emergency and Retirement Savings Act of 2021 and your leadership addressing critical retirement and savings needs. On behalf of our large employer membership, we look forward to working with you to advance this legislation this year,” said Aliya Robinson, Senior Vice President, Retirement and Compensation Policy, The ERISA Industry Committee (ERIC). View the full letter HERE.
“The critical need for emergency savings is why we support the ‘Enhancing Emergency and Retirement Savings Act of 2021.’ This legislation would be a major step forward in providing a penalty-free source of emergency savings. We also believe that if low and middle-income individuals know that they can access their retirement savings without a penalty in the case of an emergency, they will feel comfortable contributing more, so that the bill would enhance both emergency savings and retirement savings,” said David Ireland, Global Head of Defined Contribution, State Street Global Advisors. View full letter HERE.
“LPL Financial (“LPL”) applauds your leadership in addressing an issue that has arisen as a major concern for millions of Americans—the need for emergency savings. We believe that your bill, the ‘Enhancing Emergency and Retirement Savings Act of 2021,’ would create a critical source of emergency savings while also strengthening the retirement security system,” said Michelle Kelley, Senior Vice President, Government Relations, LPL Financial. View the full letter HERE.
“The National Association of Insurance and Financial Advisors supports S.1870, The ‘Enhancing Emergency and Retirement Savings Act of 2021.’ The bill authorizes inclusion in an IRA or retirement savings plan, at the plan sponsor’s election, a provision that would allow for small, controlled emergency withdrawals from IRAs and employer-sponsored retirement savings plans. We applaud your leadership on this important issue,” said Kevin M. Mayeux, CAE, CEO of the National Association of Insurance and Financial Advisors. View the full letter HERE.
“On behalf of the American Council of Life Insurers (ACLI), I thank you both for your leadership on the issue of family financial security, and in particular, emergency savings with the introduction of S.1870, the Enhancing Emergency and Retirement Savings Act of 2021... ACLI applauds your commitment toward solutions to help the many American families that lack short-term emergency savings. S.1870 seeks to address this critical savings need.” said Susan K. Neely, President and CEO of the American Council of Life Insurers. View the full letter HERE.
“Writing on behalf of the Women’s Institute for a Secure Retirement (“WISER”), we are pleased to support your bill -- the “Enhancing Emergency and Retirement Savings Act of 2021” – which would not only provide a new source of emergency savings but would do so in a way that strengthens retirement savings, another critical issue for working women… Moreover, we are hopeful that the bill will lead to higher levels of retirement savings, because workers will feel more comfortable contributing to a retirement plan knowing that they have access to the savings for emergencies if needed,” said Cindy Hounsell, President of the Women’s Institute for Secure Retirement. View the full letter HERE.
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