Hickenlooper & Tillis Reintroduce Retirement Savings Bill
On October 19, Senators John Hickenlooper (D-CO) and Thom Tillis (R-NC) reintroduced the Retirement Savings for Americans Act. 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 one-pager, 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.
In a press statement, Sen. Hickenlooper said, “Americans who work hard their entire lives deserve to retire with dignity. This bill helps low-income workers enjoy a secure retirement and fulfill their American dream.” Sen. Tillis noted in a statement that “roughly 40 million Americans lack access to an employer-sponsored retirement plan […] the Retirement Savings for Americans Act tackles this real problem by establishing a pathway for savings for Americans lacking retirement options.”
A companion bill is expected to be introduced in the House of Representatives by Reps. Terri Sewell (D-AL) and Llyod Smucker (R-PA) in the coming days.
Regarding the Hickenlooper/Tillis bill, IRI has not taken a position in favor or against it when it was introduced during the last session of Congress. 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 during their working years, and more needs to be done to expand the opportunities for those workers to save. However, IRI believes that the solution offered by this bill to make all full- and part-time workers who lack access to an employer-sponsored retirement plan eligible for an account that would be established and maintained by the Treasury Department is not the approach that IRI would support to address this challenge.
Instead, IRI believes that the best approach to addressing the workplace coverage challenge is to enact a proposal offered by the House Committee on Ways and Means Ranking Member Representative Richard Neal (D-MA), which IRI has long supported. Rep. Neal’s bill has not yet been reintroduced during this session of Congress, but it is expected sometime this year. The Neal bill would generally require all but the smallest of employers to maintain an automatic retirement savings plan, into which employees would be automatically enrolled with the ability to opt-out. IRI prefers this approach because it would use the existing private sector retirement system to provide a solution versus a federal government-sponsored solution offered by the new bill.
IRI will continue to monitor for any action on the Retirement Savings for Americans Act.
