U.S. Department of Labor officials want to make retirement security part of the social justice movement, calling on a prominent policy advocate to carry that message across the country.
Former Lieutenant Governor of Maryland
Millions of working Americans are not saving at all or not saving enough for retirement, paving the way for a generation of financially insecure retirees who could threaten to undermine future state and federal social safety nets. Those who favored a broad federal approach to this problem were discouraged when a proposal for mandatory savings died with the President
Kennedy Townsend was appointed Secretary of Labor
“So many people are reluctant to retire, and it’s not just individuals, but also social justice groups,” she said. “So one of the goals is to re-engage social justice groups that have talked about the $15 minimum wage, or paid sick leave, or that we need better health benefits, and say, ‘The retirement should also be part of that conversation.’”
Kennedy Townsend and Walsh will meet with the president of the American Federation of Teachers
In June, Kennedy Townsend plans to meet with Connecticut Treasurer
“It sends a very important message that we are part of a three-legged stool,” she said. “We need to have strong social security, we need to have strong employer benefits, and we need to hope that people can save on their own.”
The department has planned events in Colorado, Kansas, North Carolina, Ohio, Virginia and Washington, featuring leaders from several successful state-sponsored work and savings programs, said Kennedy Townsend.
Only about half of U.S. workers participate in a retirement plan, and access to workplace savings is trending down as companies transition from traditional defined-benefit pension plans to 401(k) plans cheaper.
This development has highlighted disparities in the defined-contribution pension market that disproportionately affect workers of color and women, who already earn lower wages on average and, in some cases, face unfair practices. discriminatory hiring.
Simple solutions can turn the tide, Kennedy Townsend said. She wants to encourage employers to offer options for automatic enrollment in retirement savings and portability for savings programs between jobs.
Turning flat-rate retirement benefits into lifetime income options should be a priority, she added. “We want to make sure everyone, wherever they work, has the opportunity to get benefits.”
From state to federal
After leaving state government in 2003, Kennedy Townsend devoted much of his time to the retirement savings gap in the United States, particularly state initiatives to help workers save when their employers do not. She founded the Center for Retirement Initiatives to follow these state strategies and chaired a task force that created MarylandSaves, a workplace and emergency savings initiative slated to go into effect later this year.
The state’s automatic Individual Retirement Account programs have blossomed since 2017, when OregonSaves launched the nation’s first pilot scheme to catch workers who weren’t building nest eggs. Since then, 14 states have launched some form of government-sponsored self-IRA or open market savings plan.
Despite these efforts, Kennedy Townsend said, a federal solution to retirement policy remains the best answer.
“My belief is that it will eventually be a federal program when you see the success of all these state programs,” she said. “It helps small businesses on the one hand and it helps small business employees save for retirement, which they weren’t able to do so easily before.”