Senate Finance Committee Hearing on New Retirement Options

Comstock/Thinkstock(WASHINGTON) -- With less than one-half of workers having access to a retirement plan and even fewer saving enough for their old age, Congress is looking at ways to help get more Americans on track to a secure retirement.

On Thursday, the U.S. Senate Finance Committee will listen to proposals from a range of interests. On the table are such ideas as revamping the tax treatment of 401(k) plans to make the system more automatic, and possibly adding caps to make contributions less tax-favorable to higher-income workers.

The hearing comes as the so-called retirement deficient income, the gap between the pension and retirement plans Americans have today and what is necessary to maintain living standards, is at a high of $6.6 trillion, according to the Retirement Research Center.

A series of hearings are expected to take place that will look at the economy and tax code. The Finance Committee is expected to make recommendations to the new Joint Select Committee on Deficit Reduction, tasked with finding $1.6 trillion in savings to curb the federal budget deficit.

One controversial proposal comes from the Brookings Institute. Senior Fellow William Gale will talk about reinventing 401(k)s by substituting the current deduction for contributions with a flat-rate refundable credit that would be deposited directly into the saver's account.

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