Senate HELP Hearing Spotlights Social Security Reforms, Early Career Savings 

The Senate Committee on Health, Education, Labor and Pensions held a sweeping hearing on the future of retirement saving on Wednesday, debating legislative proposals ranging from Social Security reform to expanding early access to retirement plans. 

Senators and witnesses spoke about legislation seeking to address Social Security’s finances; debated whether to expand early access and automatic re-enrollment in workplace plans; and sparred over the appropriate role for environmental, social and governance factors in retirement plan investing. 

Chaired by Senator Bill Cassidy, R-Louisiana, with Senator Bernie Sanders, I-Vermont, as ranking member, the session featured testimony from James Copeland, a senior fellow and director of legal policy at the Manhattan Institute; financial adviser Chad Williams of Edward Jones; and Richard Fiesta, executive director of the Alliance for Retired Americans. 

Social Security Solvency 

Sanders advocated his long-standing plan to “lift the cap” on payroll taxes to help fund Social Security. He argued this would secure Social Security’s funding for 75 years and boost benefits. This aligns with his bill to raise annual Social Security benefits by $2,400 and fund the program by taxing households earning more than $250,000. 

Fiesta endorsed the approach, saying it would bolster the trust fund and improve service at the Social Security Administration, which he noted is “at its lowest level of employees in 50 years.” 

The SSA reported in June that its trust funds are projected to be depleted by 2034. If that happens, only 77% of promised benefits could be paid that year, unless Congress takes action to strengthen the funds’ finances. 

Several senators from both parties emphasized that retirees depend on Social Security as the cornerstone of their financial plans. Edward Jones’ Williams stressed that clients need “clarity, predictability and confidence” that the system they pay into will be there for them in retirement. 

ESG, Private Equity, Fiduciary Duties: Where Politics Got Messy 

The committee’s partisan divide was most evident during discussions on environmental, social and governance issues; private equity; and the Department of Labor’s former fiduciary rule. 

Copeland criticized the DOL’s post-2020 guidance that, in his view, “countenanced” ESG-oriented investing by ERISA fiduciaries. He argued that inclusion of investments with non-pecuniary goals “will lead to reduced returns” and urged a return to a stricter interpretation requiring decisions be made “solely on financial considerations.” His written testimony released prior to the hearing similarly stressed his view against incorporating ESG considerations in retirement investing.  

Several Republicans echoed concerns that pension and 401(k) assets were being used to “lean in” on social and environmental agendas.  

The decision to move away from any diversity, equity and inclusion initiatives has been a major focus of President Donald Trump’s administration. 

In May, the DOL announced it would craft a new ESG rule to replace the one put in place under former President Joe Biden. The Biden-era ESG rule did not mandate that plan sponsors consider ESG factors when making investment decisions but encouraged them to use ESG considerations as a “tiebreaker” if two investment options offered the same return. 

Democrats, meanwhile, defended another Biden-era rule: Members of Congress said the fiduciary rule requires advice in retirement accounts to be in the saver’s best interest. Democrats also and raised alarms about allowing 401(k) accounts to include private-market investment products, which can have higher fees and less transparency.  

In the case of the fiduciary rule, Trump’s DOL swiftly withdrew the government’s appeal defending it from ongoing legal challenges. This month, the U.S. 5th Circuit Court of Appeals approved the DOL’s request to dismiss its appeal, thereby dropping federal support for the rule. 

Meanwhile, Trump signed an executive order in August directing federal regulators to provide guidance on how plan sponsors can include “asset allocation funds containing investments in alternative assets” in defined contribution plans and remain in compliance with ERISA’s fiduciary requirements.  

Fiesta called private equity “some of the most opaque” investments and ill-suited to workers seeking predictable retirement income. 

Earlier Saving, Automatic Enrollment 

During the hearing, two previously introduced bipartisan initiatives received support: allowing full-time workers as young as 18 (rather than 21) to join workplace retirement plans and automatically re-enrolling employees who had opted out. 

Williams threw his support behind both the Helping Young Americans Save for Retirement Act and an Auto Re-Enroll Act championed by Cassidy and Senator Tim Kaine, D-Virginia, calling them “tools” that would meaningfully lift participation. He recounted clients who believed they were enrolled when they were not and others who intended to restart saving after a short financial shock but “completely forgot” without a prompt. Copeland, too, said the proposals apply a common-sense “nudge” that behavioral economists have long recommended.  

Saving earlier would highlight “the power of compound investing,” Copeland said, and he went on to argue that giving 18-year-olds access to retirement accounts is consistent with other responsibilities granted at that age, such as serving in the U.S. military and voting. 

Caregiving, Long-Term Care 

Senators from both major parties speaking at the hearing also highlighted caregivers who step out of the workforce and lose retirement accruals. 

Williams praised bipartisan bills led by Senator Susan Collins, R-Maine, and Mark Warner, D-Virginia, to allow non-earning caregivers to contribute to Roth individual retirement accounts and to make extra catch-up contributions once they return to work. 

The bills—the Improving Retirement Security for Family Caregivers Act and the Catching Up Family Caregivers Act—were introduced in the last Congress but did not advance. Collins said during the hearing that she was working to reintroduce the legislation. 

Some Democratic senators, and Fiesta, from the Alliance for Retired Americans, warned that the cost of care also provides challenges for retirement saving.  

Fiesta said that rising costs for “food, fuel [and] health care” are squeezing both current retirees and savers, and he urged structural solutions for long-term care.  

He cited Washington State’s payroll-funded program that provides a modest long-term care benefit as one state-level model to consider, while cautioning that “you can’t save your way” to cover long-term care entirely on your own.