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Retirement Security Proposals to Benefit Women

President Clinton and Vice President Gore have announced two proposals to improve women’s financial security after retirement.

The first proposal would guarantee that time taken off from work under the Family and Medical Leave Act (FMLA) would be counted in retirement plan vesting requirements. Unpaid employee leave under FMLA can be up to 12 weeks for parents caring for a new child, to look after a severely ill member of the family, or due to a worker who has a serious health condition.

Including time taken under FMLA can make a lot of difference for workers receiving credit toward their pensions, and especially for women, who are often the ones taking care of newborns and sick family members, and who might not otherwise be credited for an entire year of work.

The second proposal would increase financial security for widows and widowers. Currently, surviving spouses often lose 50 percent of their monthly pension payments after their spouses die. Since women tend to live longer than men, it is largely widows who must survive on the reduced pension payments.

The new proposal would require pension plans to offer an optional survivor benefit that pays at least 75 percent of the amount paid when both persons were alive. Couples would receive a smaller amount when both are living, allowing the survivor to receive more later on.

Sources:

U.S. Newswire - October 27, 1998