在美国众议院健康、就业、劳动和养老金小组委员会关于“为当今劳动力实现退休政策现代化”的听证会上作证

“Modernizing Retirement Policy for Today’s Workforce”U.S. House Subcommittee on Health, Employment, Labor, and Pensions January 7, 2026 Good morning, Chairman Allen, Ranking Member DeSaulnier, and members of theSubcommittee. I am Nari Rhee, Director of the Retirement Security Program at the UC BerkeleyCenter for Labor Research and Education (Labor Center). Thank you for this opportunity toappear before you. I would like to highlight the challenges that most American workers face in the existingretirement system and offer some considerations for integrating lifetime income products into401(k) plans. ●Despite record assets held in 401(k)s and IRAs, the reality is that almost half of workersare not covered by a job-based retirement plan, and a large majority of working-agehouseholds in the U.S. face a significant retirement savings shortfall.●In this context, it is critical to safeguard Social Security, which is the primary defenseagainst poverty for American workers, and to continue to protect their hard-earnedretirement savings from being eroded by excessive 401(k) fees.●The need to generate predictable income from 401(k)s is a legitimate, longstandingconcern for plan sponsors and policymakers — but given the complexity of annuityproducts, workers need robust guardrails against unnecessary costs and risks. 1.The Current Retirement System Is Leaving the Majority of Workers Behind The U.S. retirement system is failing to provide a path to security for a large segment ofthe workforce. Employer-sponsored retirement plan coverage varies widely by industry,occupation, firm size, and full-time/part-time status, effectively excluding most low-wageworkers.1Nearly half of all U.S. workers employed in wage and salary jobs—including79% of workers in the bottom 20% of the earnings distribution and 64% of those in thenext 20%—are not covered by a workplace retirement plan(Figure 1). This is a reformatted version of the official testimony submitted to the HELP Subcommitee, which can be foundon the“Modernizing Retirement Policy for Today’s Workforce” hearing webpage. Consequently,two out of five working-age households haveno 401(k) or IRA assets(Figure 2). Among households aged 25-64, the rate of retirement account ownership—i.e., ownership of assets in 401(k)-type accounts or IRAs—declined after the 2007 financial crisisand only recently recovered in 2022 at 59%. On the bright side, retirement account ownershipsteadily increased for younger households aged 25-34, from 46% in 2013 to 56% in 2022.However, mid- and late-career households (aged 45-54 and 55-64) in 2022 were significantlyless likely to have 401(k) or IRA assets in than their counterparts in 2007. Modernizing Retirement Policy for Today’s Workforce•Nari Rhee, Ph.D.•page 2Testimony before U.S. House Subcommittee on Health, Employment, Labor, and Pensions Given the large share of households with no retirement account, the typical (median)retirement account balances among working-age households aged 25-64 was just $8,000 in2022, with wide inequality between white and Asian households on one hand and Black andLatino households on the other (Figure 3).For those near retirement (aged 55-64), thetypical (median) account balance was just $20,000, a small fraction of the “average” balanceof $195,000 for this group (Figure 4.) Modernizing Retirement Policy for Today’s Workforce•Nari Rhee, Ph.D.•page 3Testimony before U.S. House Subcommittee on Health, Employment, Labor, and Pensions While total retirement assets have reached record highs, this growth masks a profound andwidening inequality. AsFigure 5shows, 401(k) and IRA assets are increasingly concentrated atthe top. Among near-retirement households (ages 55-64), the share of 401(k)/IRA assets heldby the bottom 70% was a mere 4.9% in 2022, reflecting a substantial decrease from 7.2% in2007. Conversely, the top 20% of households in this age group held 86.5% of 401(k)/IRA assetsin 2022, up from 84.1% in 2007. According to studies by Federal Reserve economists, the decline of defined benefit pensionsand the rise of 401(k)s have contributed to growing wealth inequality in the U.S.2Conversely,Social Security and defined-benefit pensions play a significant role in modulating retirementinequality.3 Insufficient Wage Growth Wages and income are neglected in retirement savings discussions, and here I want to brieflytouch on two important factors: slow wage growth and increased income volatility, both ofwhich make it difficult for workers to save. While low-wage workers saw gains during the pandemic, these gains were a break from a40-year pattern of wage stagnation. Real median wage growth has lagged far behind economicgrowth: between 1979 and 2024, U.S. productivity increased by over 100%, while real medianwages grew by less than one-third that amount.4(See Figure 6.) Low wages and incomes suppress retirement plan participation and savings rates. Whileauto-enrollment and auto-escalation of contributions in 401(