The following statement is authored by Tim Shaw, Associate Director of Policy of the Aspen Institute’s Financial Security Program.
Contact: Jon Purves
Jon.Purves@AspenInstitute.org
Washington, D.C., December 23, 2022 — Lawmakers successfully passed “SECURE 2.0,” which will improve the U.S. retirement system, as part of the broad $1.78 trillion spending bill to fund the government on Friday.
SECURE 2.0 was developed to build on improvements to the retirement system that were ushered in by the 2019 SECURE Act. The changes as part of SECURE 2.0 include giving part-time workers better access to retirement benefits, an enhanced government match for low- and moderate-income workers’ retirement savings, and fundamentally shaping workplace emergency savings benefits by allowing for automatic enrollment into some workplace emergency savings accounts for the first time in the U.S.
“The passage of SECURE 2.0 will meaningfully improve the ability of workers in America to save for retirement and emergencies. Congress should be congratulated on their ongoing, bipartisan commitment to improving savings systems for people in America,” said Tim Shaw, Associate Director of Policy for the Aspen Institute Financial Security Program. “The emergency savings provisions lay the groundwork for a new generation of savings tools at the workplace that will help workers build financial resilience. Automatic enrollment in emergency savings has long been a priority for Aspen and other leaders focused on financial security, and will continue to be as the field builds new products and expands those insights to other benefits that enhance financial resilience.”
Shaw said the bill provides critical enhancements to workers’ ability to save for retirement by boosting the Saver’s Credit for workers who need it most, increasing the number of part-time workers who have access to workplace retirement savings, and increasing access to automatic enrollment into retirement accounts —these enhancements alone will help millions of workers save who currently cannot.
Shaw said SECURE 2.0 should be celebrated, but “come January, it’s time to get back to work as 57 million U.S. workers still lack access to workplace retirement plans.”
“There is real work ahead to ensure that more employers offer emergency savings as a benefit using the new products that will be enabled by this bill, and to pave the way for automatic enrollment into other types of savings tools to support families who do not have access to workplace retirement plans,” Shaw said. “Public and private benefits are necessary tools to weather the financial shocks of today, and prepare for storms in the future. In order for this to work, those benefits have to work, and they have to work together, and they have to work for everyone.”
The impact and critical importance of workplace emergency savings and other workplace and public benefits’ in supporting household finances will be highlighted during Aspen Institute Financial Security Program’s Financial Resilience Summit in Washington D.C. in February of next year.
Provisions of SECURE 2.0 include:
- Making it easier for workers to save and access emergency funds through allowing for automatic enrollment into retirement-linked emergency savings accounts
- Making the saver’s tax credit more generous for the lower- and middle-income workers who qualify.
- Letting more part-timers qualify for their company’s 401(k) after they have booked at least 500 hours a year for two years instead of three years.
- Making it easier for employers to make contributions to 401(k) plans on behalf of employees paying student loans instead of saving for retirement.
- Allowing student loan borrowers to have their loan payments count towards their employer match.
- Requiring new employers who provide retirement plans to use automatic enrollment
- Allowing people to put more money in a qualified longevity annuity contract, or QLAC.
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Editor’s Note: Members of the media interested in interviewing Tim Shaw should contact Kelsey Duckett: Kelsey.Duckett@AspenInstitute.org.
Tim Shaw is the Associate Director of Policy for the Financial Security Program. Tim works to advance promising policies that address the most pressing financial security challenges facing people in America. Working with leaders across levels of government, Tim and Aspen FSP’s policy team seek to provide policymakers the innovative ideas, research, and network of leaders they need to design and enact policies that make a concrete difference in people’s financial security.
Before joining the Aspen Institute, he was an Associate Director for Economic Policy at the Bipartisan Policy Center. While there, he was the policy lead for BPC’s Paid Family Leave Task Force and led projects on economic opportunity, retirement security, and fiscal policy. Prior to that work, he was a tax and budget staffer at the Government Accountability Office. His work has been featured in numerous publications, including the Washington Post, Politico, and the Wall Street Journal.
Tim holds a B.A. in Political Science and Spanish from Washington University in St. Louis and a master’s degree in Public Policy and Management from Carnegie Mellon University.
The Aspen Institute Financial Security Program’s (FSP) mission is to illuminate and solve the most critical financial challenges facing American households and to make financial security for all a top national priority. We aim for nothing less than a more inclusive economy with reduced wealth inequality and shared prosperity. We believe that transformational change requires innovation, trust, leadership, and entrepreneurial thinking. FSP galvanizes a diverse set of leaders across the public, private, and nonprofit sectors to solve the most critical financial challenges. We do this through deep, deliberate private and public dialogues and by elevating evidence-based research and solutions that will strengthen the financial health and security of financially vulnerable Americans. To learn more, visit AspenFSP.org, join our mailing list at http://bit.ly/fspnewsletter, and follow @AspenFSP on Twitter.
The Aspen Institute is a global nonprofit organization committed to realizing a free, just, and equitable society. Since its founding in 1949, the Institute has been driving change through dialogue, leadership, and action to help solve the most critical challenges facing communities in the United States and around the world. Headquartered in Washington, DC, the Institute has a campus in Aspen, Colorado, and an international network of partners. Learn more at www.aspeninstitute.org.