Thank you, Shinae [Chun, Director of the Women’s Bureau, U.S. Department of Labor].
It’s great to be here with so many women leaders and others who are committed to helping women achieve financial independence and security.
Let me thank the Financial Planning Association for co-sponsoring this event. I also want to recognize American Express for providing the venue for this first-ever Wi$e Up conference on Wall Street.
Just last week I participated in the Department’s annual Financial Independence Day campaign to encourage all Americans to take greater ownership over their retirement planning. So this afternoon, I’d like to talk about the Department’s efforts to promote retirement security for all Americans, and especially to empower women with the tools they need to plan a secure financial future.
As you heard earlier today, the Department’s Wi$e Up program is an innovative effort to provide women with information on how put their financial house in order. The program offers women a comprehensive, eight-part curriculum on budgeting, the use of credit, smart investing, and financial planning. The program is also designed with the maximum amount of flexibility, so hard working women and mothers can access this information when it is most appropriate for them. In addition to classroom instruction, the same curriculum is offered online. Courses include added support such as bimonthly conference calls and the ability to email questions to over 80 financial experts. So it’s a great program!
The Wi$e Up program is operated by the Texas AgriLife Extension Service of the Texas A&M University System. I encourage all of you who are not already a part of this path breaking program — which is entirely free — to visit the homepage at www.wiseupwomen.org.
Women in particular need to learn more about managing their earnings because studies show that women lag behind men in retirement planning. Of the 62 million wage and salaried women age 21 to 64 working in the U.S. in 2006, just 45 percent participated in a retirement plan. Here are some other facts worth noting:
1. On average, a woman retiring at age 65 can expect to live another 19 years — that’s three years longer than a man retiring at the same age. So careful savings and retirement planning is especially critical for women.
2. Women are also more likely to work in part-time jobs, and thus less likely to have access to a retirement plan. And working women are more likely than men to interrupt their careers to take care of family members. So they may work fewer years and contribute less toward their retirement.
Another reason that financial literacy is so important for women is that women have positioned themselves for tremendous gains in the workforce. As many of you know, our economy is transitioning to a knowledge-based economy in which higher education is more important than ever before. And women are accessing higher education in record numbers.
For example, today, American women complete high school at higher rates than men. They are more likely to enter and graduate from college than men. In fact, the number of women holding a bachelor’s degree or higher has more than doubled in the past 20 years. And just look at how far women are advancing in the professions:
1. Almost half of all medical school students are women,
2. Over 35 percent of all MBA students are women,
3. And nearly 47 percent of all law school students are women.
And a look down the road shows that women are positioning themselves for even greater gains over the next20 years. In 2007, women comprised more than half of all advanced degree holders under the age of 40.
As women make these significant gains, it’s more important than ever before to ensure that they have the tools they need to budget and use their resources wisely.
And that is where all of you come in. As top executives, human resources professionals, diversity managers, and nonprofit leaders serving women, you have unique opportunities to reach out to women and spread the message of the importance of financial literacy and financial planning. You play a critical role in introducing working women to the products and services that make retirement easier, and more accessible. So let me thank you for working with us to get the message out about the resources available through the Wi$e Up program.
As you may know, part of the Labor Department’s mandate to protect workers includes the responsibility to oversee private sector benefit plans. And today, the Department has oversight of more than 700,000 private retirement plans, 2.5 million private health plans, and similar numbers of other welfare benefit plans. These plans hold about $6.1 TRILLION in assets and cover approximately 150 million Americans!
Protecting the retirement assets of millions of Americans is no small undertaking. I am very proud of the Department’s effort to protect the retirement security of America’s workers. Our enforcement numbers increased dramatically under this Administration. In 2007 alone, the Department reported $1.5 billion in monetary results — double the results in 2001. And since 2001, the Department achieved monetary results of nearly $11 billion for worker’s pension and health plans, and more than 800 criminal indictments.
The Department also led this Administration’s efforts to strengthen private, defined benefit pension plans, which culminated in the Pension Protection Act signed into law by President Bush on August 17, 2006.
The Act makes the most sweeping change to the rules governing retirement plans since 1974. One of its key provisions fosters greater participation in 401(k) and similar plans through so-called “automatic enrollment.” With automatic enrollment, employers can enroll workers in their employers’ defined contribution pension plan unless workers affirmatively say they do not want to participate. This is a big change from the past, when the individual worker had to affirmatively say “yes” if he or she wanted to participate in an employer provided pension plan.
In plans with automatic enrollment, the rate of participation is likely to jump to more than 90 percent of eligible workers. And, experts project that automatic enrollment will increase retirement savings in the United States by as much as $134 billion by 2034. This will help many more workers and their families build a nest egg for a secure and comfortable retirement.
America is characterized by a spirit of optimism in all phases of life. And sound financial planning can make a secure retirement — that was once available only to a few — a reality for all Americans, especially American women.
So thank you for everything you are doing to help women access the tools they need to plan for a financially secure future.
I challenge you to redouble your efforts to ensure that more women have access to the long term financial security they need.