New Bipartisan Retirement Savings Bill Introduced
Senators John Hickenlooper (D-CO) and Tom Tillis (R-NC), and Representatives Terri Sewell (D-AL) and Lloyd Smucker (R-PA) introduced the Retirement Savings for Americans Act. A press release from Sen. Hickenlooper explains that the bill would establish a new government program providing a portable, tax-advantaged retirement savings account for eligible workers and give federal matching contributions to low and middle-income workers.
The press release further explains the bill contains the following provisions:
- “Eligibility and Auto Enrollment: Full- and part-time workers who lack access to an employer-sponsored retirement plan would be eligible for an account, and they would be automatically enrolled at 3% of their income. They could choose to increase or decrease their withholding or opt out entirely at any time. Independent workers (including gig workers) would also be eligible.”
- “Federal Contribution: Low- and moderate-income workers would be eligible for a 1% automatic contribution (as long as they remain employed) and up to a 4% matching contribution via a refundable federal tax credit. This would begin to phase out at median income.”
- “Portability: Accounts would remain attached to workers throughout their lifetimes, and workers would be able to stop and start contributions at will.”
- “Private Assets: The accounts would be the property of the worker and the assets could be passed down to future generations to help them build wealth and financial security.”
- “Investment Options: Much like the current Thrift Savings Plan, participants would be given a menu of simple, low-fee investment options to choose from, including lifecycle funds tied to a worker’s estimated retirement date, or index funds made of stocks and bonds.”
The introduction of this bill is not anticipated to affect the progress of SECURE 2.0 as Rep. Smucker summed up this group’s stance, stating he “looks forward to continuing to advance this legislation in the next Congress and building upon the successes of SECURE 2.0.”
Any further developments regarding this bill, and SECURE 2.0 separately, will be monitored and details shared.