Retirement Savings for Americans Act Reintroduced in the House
Representatives Llyod Smucker (R-PA) and Terri Sewell (D-AL) reintroduced the Retirement Savings for Americans Act last week. The bill would create a federal program to provide eligible workers with access to portable, tax-advantaged retirement savings accounts. The bill would automatically enroll full and part-time workers and make independent workers eligible for participation. These accounts, according to a press statement, would provide participants with a menu of “low-fee” investment options participants will be able to choose from. Low- and middle-income workers would also be eligible for a 1 percent automatic contribution and up to a 4 percent matching contribution in the form of a tax credit.
A companion bill was introduced earlier this month in the Senate by Senators John Hickenlooper (D-CO) and Thom Tillis (R-NC). IRI has not taken a position in favor or against the Retirement Savings for Americans Act. IRI has said that it agrees that there is a challenge in providing opportunities for workers – particularly employees of small businesses – to save through a workplace retirement plan and that more needs to be done to expand opportunities for those workers to save. However, IRI believes that the solution offered by the Retirement Savings for Americans Act to provide workers eligible for a savings account established and maintained by the Treasury Department is not an approach IRI would support to address this challenge.
Instead, IRI supports an approach that utilizes the existing private sector retirement system to provide a solution rather than a federal government-sponsored solution. The proposal offered by Representative Richard Neal (D-MA), which would generally require all but the smallest of employers to maintain an automatic retirement savings plan, would provide this solution. IRI has long supported Rep. Neal’s proposal. While Rep. Neal’s bill has not yet been reintroduced, it is expected sometime this year.
IRI will continue to monitor for any action on the Retirement Savings for Americans Act.
