Sec. 2. Findings

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Congress finds the following: Approximately 25 percent of non-retired adults have no defined benefit plan or retirement savings, according to 2020 data from the Board of Governors of the Federal Reserve System. In 2020, one-third of the private sector workforce did not have access to a retirement plan at the workplace, and only half of the workforce actually participated in a retirement plan. Women’s retirement preparedness often lags significantly behind their male counterparts, resulting in the median income for women aged 65 and older in 2020 being just 83 percent of the median income of men aged 65 and older, including income from Social Security, pension plans, investments, and earnings.

Among people aged 75 and older, 13.2 percent of women live in poverty, while 8.8 percent of men live in poverty. Women make up two-thirds of low-wage workers, even though they comprise less than half of all workers, and low-wage workers are less likely than other workers to participate in a retirement plan at work. Because of the pay gap, women working full-time, year-round typically lose $406,280 over a 40-year career thereby requiring the average woman to work almost a decade longer than her male counterpart to make up that career wage gap.

For Black and Latina women, the career wage gap is even larger at $964,400 and $1,163,920, respectively. Due to the lower lifetime wages stemming from unequal pay and caregiving duties, the average Social Security benefit in 2019 for a woman age 65 or older was $13,505 a year, while for men such average benefit was $17,374 a year. The COVID–19 pandemic has exacerbated the existing gender gap in retirement savings as women have been more likely to leave the workforce for caregiving.

Women, especially women of color, have also been more likely to lose their jobs during the pandemic due to overrepresentation in industries severely hit by the pandemic. Just 1 in 5 part-time workers who work a full year are eligible for a retirement plan, and women are almost twice as likely as men to work part-time. While traditional defined benefit retirement plans have spousal protections, defined contribution retirement plans, which have become increasingly common, currently provide no similar spousal protections.

Every year, more than 1,200,000 couples get divorced in the United States. After the family home, retirement savings tends to be the largest asset to be divided in a divorce. While fees and expenses associated with retirement plans have been in decline, participants have seen direct charges for processing qualified domestic relations orders increase significantly.