On July 27, the US Department of Labor announced $100,000 in grant funding to encourage organizations to develop workable models for portable retirement savings benefits.
This is a promising step toward creating a portable benefits system for our country’s changing nature of work. Earlier this month, the Aspen Institute Future of Work Initiative released the Portable Benefits Resource Guide for policymakers, which outlines the questions policymakers will have to ask and answer when updating the social safety net for those who have alternative work arrangements.
The DOL grants will be made available through the newly created Portable Retirement Benefits Planning grant program. Funding will be awarded to organizations to identify the existing challenges in the current retirement system for workers — particularly women, and those in lower-income occupations — and to expand and develop new portable retirement savings models for their members and constituents.
Virginia Senator Mark Warner had this to say in a press release: “As the nature of work continues to change, we must encourage even more investment in this type of innovation that adapts to the changing needs of a 21st century workforce.”
The DOL planning grants are building on the momentum for portable benefits. Last fall, a “strange bedfellows” group of CEOs and worker advocates penned a letter calling for a portable, pro-rated and universal social safety net. President Obama echoed the call for portability in his 2016 State of the Union address, and we saw action when an unlikely first mover, Uber, recognized the new Independent Drivers Guild.
Policymakers are talking about this need, as well. The same day the DOL grant came out, Sen.Warner spoke in Philly at an event around the Democratic National Convention about the need to create a new social contract between workers and employers, and I’ll be moderating a panel the first week of August on portable benefits for the National Governor’s Association in Chicago.
Creating a modern social safety net won’t happen overnight, and to fashion something universal and portable that works, we have to start on a small scale to work out the kinks and test the concepts. The vision is bold but getting there will take deliberate, thoughtful action. But as Lao Tzu said, “A journey of a 1,000 miles begins with a single step.”
