115th Congress, 2nd Session

Legislative Proposals

National Savings Proposals

Other Reform Proposals

Legislative Proposals

National Savings Proposals

USA Retirement Funds Act

Introduced as H.R. 7148 by Representative Matt Cartwright (D-PA) on November 16, 2018.

The bill requires each employer (except certain small employers, governments, and churches) that does not maintain a qualifying plan or arrangement meeting specified criteria for any part of a calendar year to make available to each qualifying employee for the calendar year an automatic USA Retirement Fund arrangement.

It defines an “automatic USA Retirement Fund arrangement” as one that covers each qualifying employee of the covered employer (defined as an employer who does not maintain a qualified retirement plan or arrangement for any part of the year) for the calendar year and under which a qualifying employee: (1) may elect to contribute to an automatic USA Retirement Fund through payroll deductions or other periodic direct deposits (including electronic payments), or to have such payments made to the employee directly in cash; (2) is treated as having made such an election in a certain amount unless the individual specifically elects not to have such contributions made or to have them made at a different percentage or in a different amount; (3) may elect to modify the selection of the USA Retirement Fund to which contributions are made for such year not more than once per calendar year; and (4) may elect to terminate participation in the arrangement at any time.

Contributions would begin at 3 percent of compensation beginning on January 1, 2019, and rise 1 percent per year until it reaches 6 percent beginning after December 31, 2021.  The bill would limit an employer’s contribution to a Fund on behalf of each employee to $5,000 and the employee’s contribution to $15,000.

The bill specifies requirements for the establishment of each USA Retirement Fund and its board of trustees, which shall consist of at least 3 individuals who are independent of services providers to the fund and are collectively able to adequately represent the interests of active participants, retirees, and contributing employers. The Secretary of Labor shall establish a process to review plans determined to be a USA Retirement Fund.

The bill has been referred to the House Committee on Education and the Workforce and to the House Committee on Ways and Means.

Source: Congress.gov; CRI summary of bill text.

Portable Retirement and Investment Account Act

This bill was introduced as H.R. 6990 by Representative James A. Himes (D-CT) on September 28, 2018.

This bill would create a Portable Retirement and Investment Account (PRIA) for each individual at birth and follow the individual from job to job. Employers and individuals would both be able to make contributions. PRIAs would be administered by an independent board and managed by selected financial institutions. After the creation of the initial account, account holders would have the option to move the PRIA to a qualified financial institution of their choice and select from a wide variety of investment options like those offered to federal employees. Individuals who want to continue contributing to 401(k)s, IRAs and other savings plans will be able to do so. As individuals change jobs, they would be able to roll their accounts into their PRIA so at retirement they have just one vehicle to manage.

This bill has been referred to the House Committee on Ways and Means.

Source: Congress.gov; Representative Himes’ press release.

American Savings Act

This bill was introduced as S. 3242 by Senator Jeff Merkley (D-OR) on July 19, 2018.

This bill would establish a universal savings account plan, called the American Savings Account (ASA). Workers without employer-sponsored retirement plans will be automatically given an ASA and the employer will contribute 3 percent of earnings with each paycheck. The worker may adjust contributions to as low as 2 percent of income or as high as $18,000, or opt out. ASAs will have the same investment options as the Thrift Savings Plan. Contributions would be tax-deductible and participants would be able to roll over previous IRAs into ASAs and roll ASA funds to an employer-sponsored 401k or 403b plan. An independent board of directors will manage the investment of the funds.

This bill was read twice and referred to the Senate Committee on Finance.

Source: Congress.gov; Senator Merkley’s press release.

Other Reform Proposals

Retirement Security and Savings Act

Introduced as S. 3781 by Senator Rob Portman (R-OH) and Senator Benjamin L. Cardin (D-MD) on December 19, 2018.

This bill establishes a new automatic enrollment safe harbor for employers to meet nondiscrimination requirements. Under current law, the automatic deferral may be just three percent of salary for the employee’s first year. The provision would set the minimum default level of contributions at six percent in the first year, and escalate it to 10 percent within five years. The measure makes the Saver’s Credit refundable and requires that the credit be contributed directly to a Roth account in a retirement plan or to a Roth IRA. The bill allows employers to make matching contributions to retirement accounts of employees paying off qualified student loan debts. The bill expands retirement plans to include part-time employees working between 500 and 1,000 hours per year. This bill makes changes to improve access to workplace plans in the small employer market, such as creating a new three-year, $500 tax credit for employer-sponsored retirement programs that automatically re-enroll plan participants at least every three years. It makes provisions to reduce costs and other barriers to lifetime income retirement options.

This bill has been read twice and referred to the Senate Committee on Finance.

Source: Congress.gov; Senator Portman’s press release.

Retirement Parity for Student Loans Act

Introduced as S. 3771 by Senator Ron Wyden (D-OR) et al. on December 18, 2018.

This bill would permit 401(k), 403(b), and SIMPLE retirement plans to make matching contributions to workers as if their student loan payments were salary reduction contributions as a voluntary benefit that employers may elect to provide to workers. The benefit only applies to repayments of student loan debt that was incurred by a worker for higher education expenses. Additionally the benefit is only available to employees who provide evidence to their employer of their student loan debt payments. The Treasury Department would be authorized to issue regulations prescribing the conditions under which employers may rely on evidence of student loan debt submitted by workers. The bill also provides clarification on certain nondiscrimination rules that apply to 401(k) plans.

This bill was read twice and referred to the Senate Committee on Finance.

Source: Congress.gov; Senator Wyden’s press release.

Encouraging Americans to Save Act

This bill was introduced as S. 3636 by Senator Ron Wyden (D-OR) et al. on November 15, 2018.

This legislation restructures the current nonrefundable saver’s credit into a refundable, government matching contribution of up to $500 a year for middle-class workers who save through a 401(k) type plans or IRAs. The legislation would also make the full 50 percent credit rate on the saver’s credit available to taxpayers making up to $32,500 a year and require that credit be directly contributed into the saver’s retirement plan or IRA. This legislation also restores myRA, a program established in 2014 to create starter retirement savings accounts for people without access to a 401(k) at work.

The bill has been read twice and referred to the Senate Committee on Finance.

Source: Congress.gov; Senate Finance Committee Ranking Member’s press release and bill summary.

Resolution to Support the Goals and Ideals of National Retirement Security Week

Introduced as S. Res. 654 by Senator Michael B. Enzi (R-WY) on September 26, 2018.

This resolution calls for the Senate to:

(1) support the goals and ideals of National Retirement Security Week, including raising public awareness of the importance of saving adequately for retirement;

(2) acknowledge the need to raise public awareness of a variety of tax-preferred retirement vehicles that are used by many people in the United States but could be used by more; and

(3) call on States, localities, schools, universities, nonprofit organizations, businesses, other entities, and the people of the United States to observe National Retirement Security Week with appropriate programs and activities, with the goal of increasing the retirement savings and personal financial literacy of all people in the United States, thereby enhancing the retirement security of the people of the United States.

This resolution was submitted in the Senate, considered, and agreed to without amendment and with a preamble by unanimous consent on September 26, 2018.

Source: Congress.gov

Women’s Pension Protection Act of 2018

HOUSE BILL

This bill was introduced as H.R. 7026 by Representative Janice D. Schakowsky (D-IL) on October 2, 2018.

The legislation would strengthen consumer protections to safeguard retirement savings by extending protections to prevent one spouse from making decisions that could undermine a couple’s retirement resources without the other’s knowledge and consent. The bill will also improve access to retirement savings plans for long-term, part-time workers. The bill will establish a competitive grant program at the Department of Labor to help increase women’s financial literacy. The bill will also direct the Department to provide support to low-income women and survivors of domestic abuse seeking the retirement benefits they are entitled to following a divorce.

This bill has been referred to the Committee on Education and the Workforce, and in addition to the Committee on Financial Services.

Source: Congress.gov; Representative Bonamici’s press release.

SENATE BILL

This bill was introduced as S. 3436 by Senator Patty Murray (D-WA) on September 12, 2018.

This legislation would expand existing spousal protections for defined benefit plans to defined contributions plans to prevent one spouse from making decisions that might undermine a couple’s retirement resources without the other’s knowledge and consent; change the minimum participation standards for long-term, part-time workers (most of whom are women); increase financial literacy by providing grants for community-based organizations to improve the financial literacy among women who are of working or retirement age, and; support low-income women and survivors of domestic abuse seeking retirement benefits by providing grants for community-based organizations that assist them in obtaining qualified domestic relations orders, the legal instruments that allow for the division of retirement benefits.

This bill was read twice and referred to the Committee on Health, Education, Labor, and Pensions.

Source: Congress.gov; Senator Murray’s press release and fact sheet.

Family Savings Act of 2018

This bill was introduced as H.R. 6757 by Representative Mike Kelly (R-PA) on September 10, 2018.

As one of the three bills in Tax Reform 2.0 package, this bill would expand the existing and new retirement saving options for working Americans. This bill seeks to: allow small businesses to join to create a 401(k) plan in an affordable manner, give employers more time to put new retirement plans in place, and simplify the rules for participation in employer plans. This bill also aims to help workers participate in retirement plans and calls for: exempting small retirement accounts from mandatory payouts; eliminating the age limit on IRA contributions, and; allowing military reservists to maximize their retirement contributions. The bill would create universal savings accounts. Individuals would be able to contribute up to$2,500 into the accounts on an annual basis, with any withdrawals being tax free. A one-page summary of the bill is available here.

This bill was referred to the Committee on Ways and Means in addition to the Committee on Education and the Workforce.

A markup of the three bills of the Tax Reform 2.0 package is scheduled for September 13, 2018 in the House Committee on Ways and Means. Joint Committee on Taxation materials are available on the description and revenue effects of H.R. 6757 as well as amendments  and JCT description of said amendment are also available.

On September 13, 2018, this bill was ordered to be reported in the nature of a substitute offered by Chairman Brady by the Ways and Means Committee by a 21-14 vote.

On September 21, 2018, the Congressional Budget Office released a cost estimate for H.R. 6757.

On September 26, 2018, the House Committee on Rules will meet to discuss three measures, including this bill.

On September 27, 2018, this bill passed the House on a 240 – 177 vote.

On September 28, 2018, this bill was sent to the Senate, read twice and referred to the Senate Committee on Finance.

Source: Congress.gov; Representative Kelly’s press release.

Small Business Employees Retirement Enhancement Act

This bill was introduced as S. 3219 by Senator Tom Cotton (R-AR) on July 17, 2018.

This bill would increase access to workplace retirement plans by making it easier for small business owners to offer plans and modify requirements for multiple employer plans. It would eliminate the regulatory barriers that prevent small business owners from joining professionally managed pooled employer plans, thereby lowering the administrative cost of offering a plan. It would also transfer some of the fiduciary responsibility from the employer to the pooled plan provider, lessening the legal risk to small businesses – in turn, incentivizing more of them to get off the sidelines – and placing the responsibility and accountability for important plan decisions with those who have the expertise to make them.

This bill has been read twice and referred to the Senate Committee on Finance.

Source: Congress.gov; Senator Cotton’s press release.

Retirement Flexibility Act

This bill was introduced as S. 3221 by Senator Todd C. Young (R-IN) on July 17, 2018.

This bill would help more Americans accumulate savings by expanding the prevalence of well-designed workplace retirement plans, both by inspiring new plans and bringing auto features to some of the nearly half of all plans that lack them today. It would incentivize plan sponsors to use automatic enrollment and automatic escalation of contributions to levels that are considered appropriate for the average saver. Workers would always be able to opt out. The bill would further make it easier for small businesses to offer these well-designed plans by providing flexibility on the required employer contributions in order to be exempted from certain regulatory testing.

This bill has been read twice and referred to the Senate Committee on Finance.

Source: Congress.gov; Senator Young’s press release.

Strengthening Financial Security Through Short-Term Savings Act

This bill was introduced as S. 3218 by Senator Heidi Heitkamp (D-ND) on July 17, 2018.

This bill would reduce early withdrawals (“leakage”) from retirement accounts and facilitate short-term savings by allowing employers to automatically enroll their workers in emergency savings accounts in addition to retirement accounts.

This bill has been read twice and referred to the Senate Committee on Health, Education, Labor and Pensions.

Source: Congress.gov.

Refund to Rainy Day Savings Act

This bill was introduced as S. 3220 by Senator Cory A. Booker (D-NJ) on July 17, 2018.

This bill would allow individuals to pre-commit to saving their tax refunds for later in the year.

This bill has been read twice and referred to the Senate Committee on Health, Education, Labor and Pensions.

Source: Congress.gov

SIMPLE Plan Modernization Act

This bill was introduced as S. 3197 by Senator Susan M. Collins (R-ME) and Senator Mark R. Warner (D-VA) on July 11, 2018.

This bill would raise the contribution limit for SIMPLE plans from $12,500 to $15,500 for the smallest businesses (1 to 25 employees) and allow business with 26 to 100 employees the option of the higher contribution limit and increase the mandatory employer contribution requirements by one percentage point if higher limits are elected. The bill would limit increases unavailable to employers that have another defined contribution plan to encourage them to retain qualified plans and modernize SIMPLE plan form filing requirements and modify transition rules from SIMPLE plans to traditional plans. Lastly, the Treasury is directed to study the use of SIMPLE plans and report to Congress its findings as well as any recommendations.

This bill has been read twice and referred to the Senate Committee on Finance.

Source: Congress.gov; Senator Collins’ press release.

Federal Retirement Commission Act

This bill was introduced as S. 2753 by Senators Todd C. Young (R-IN) and Cory A. Booker (D-NJ) on April 25, 2018.

The bill would create a commission comprised of the Secretary of Labor, Treasury, Commerce, two presidential appointees, six U.S. Senate appointees, and six U.S. House of Representatives appointees. The commission would be charged with:

  • A comprehensive review of private benefit programs existing in the United States, with a particular focus on moving from defined benefit to defined contribution models.
  • A comprehensive review of private retirement coverage, individual and household accounts balances, investment trends, costs and net returns, and retention and distribution during retirement.
  • A comprehensive review of societal trends, including wage growth, economic growth, unique small business challenges, serial employment, gig economy, health care costs, life expectancy, and shrinking household size, that could lead future generations to be less financially secure in retirement compared to previous generations.
  • A comprehensive review of other countries’ retirement programs.

The commission would submit to Congress recommendations on how to improve or replace existing private retirement programs upon the affirmative vote of at least three-quarters of the members of the commission.

This bill has been read twice and referred to the Committee on Health, Education, Labor, and Pensions.

Source: Congress.gov; Senator Young’s press release

Retirement Enhancement and Savings Act of 2018

HOUSE BILL

Introduced as H.R. 5282 by Representative Mike Kelly (R-PA) and Representative Ron Kind (D-WI) on March 14, 2018.

This House companion bill aims to reform the employer-provided, private sector pension system to expand retirement savings options for working Americans. Among others, this bill seeks to: increase access for workers in small companies to multiple employer plans (MEPs); remove the auto-enrollment safe harbor cap; simplify safe harbor 401(k) rules; increase credit limitations for small employer pension plan start-up costs; and establish a small employer automatic enrollment credit.

This bill was referred to the Committee on Ways and Means and the Committee on Education and the Workforce.

Source: Congress.gov; Section by section of RESA.

SENATE BILL

Introduced as S. 2526 by Senator Orrin Hatch (R-UT) and Senator Ron Wyden (D-OR) on March 8, 2018.

It is a package of retirement savings reforms that include: making multiple employer plans (MEPS) more attractive by eliminating barriers and improving the quality of MEP service providers; removing the 10 percent automatic enrollment safe harbor cap; simplification of safe harbor 401(k) rules; increasing the credit for small employer pension plan start-up costs; creating a new tax credit of up to $500 per year to employers to defray startup costs for new section 401(k) plans and SIMPLE IRA plans that include automatic enrollment; repealing the maximum age for traditional IRA contributions; and allowing for portability of lifetime income options, among other reforms. This bill was previously introduced in 2016.

This bill was read twice and referred to the Committee on Finance on March 8, 2018.

Summary: Congress.gov; Senator Wyden’s press release and a section by section of RESA

Retirement Savings Lost and Found Act of 2018

HOUSE BILL

Introduced as H.R. 6540 by Representative Suzanne Bonamici (D-OR), Representative Luke Messer (R-IN) and Representative Jim Banks (R-IN) on July 26, 2018.

This bill will use data employers are already required to report to the Treasury Department to create a national lost and found for retirement accounts. It requires plan administrators to notify the lost and found whenever a participants savings are moved out of their plan and allows plan sponsors to move small accounts into age appropriate target-date funds. Lastly, it requires plan sponsors to send lost, uncashed checks of less than $1,000 to the Treasury Department for individuals to locate.

This bill was introduced and referred to the House Committee on Ways and Means in addition to the Committee on Education and the Workforce.

Source: Congress.gov; Representative Bonamici’s press release and bill summary.

SENATE BILL

Introduced as S. 2474 by Senator Elizabeth Warren (D-MA) and Senator Steve Daines (R-MT) on February 28, 2018.

This bill would create a national online database of lost retirement plans constructed from data that employers already must report to the Treasury Department, enabling any worker to locate all of their former employer-sponsored retirement accounts. The act would ensure that the lost and found is always up-to-date by requiring plan administrators to electronically notify the lost and found whenever a plan participant’s savings are moved out of their plan. The act would also make it easier for plan sponsors to move small accounts into age-appropriate target-date funds so that workers can maximize their investment returns. Lastly, the act requires plan sponsors to send lost, uncashed checks of less than $1,000 to the Treasury so that individuals can locate this money and continue to save for their retirement. A previous version of this bill was introduced in 2016.

This bill was read twice and referred to the Committee on Finance.

Source: Congress.gov; Bill summary authored by Senator Warren’s press release and fact sheet.

USAccounts: Investing in America’s Future Act of 2018

This bill was introduced as H.R. 5118 by Representatives Joseph Crowley (D-NY) and Keith Ellison (D-MN) on February 27, 2018.

This House bill calls for the establishment of USAccounts, a long-term savings account for U.S. children, and the funding of the USAccount Fund within the Treasury which will make seed deposits and matching contributions into individual USAccounts. For every child born after December 31, 2018, the federal government will deposit $500 into a USAccount as seed money. The child’s family can deposit up to $2,000 annually into the child’s USAccount. The federal government will also match dollar-for-dollar the contributions of families at the lowest income levels up to $500 per USAccount per year. Additionally, families who are eligible for the Child Tax Credit or the Additional Child Tax Credit and make a contribution to the child’s USAccount will receive up to $500 per year per account. When the child turns 18, the account will be rolled over into a USAccount IRA. Funds cannot be disbursed from the IRA until age 59.5, except for qualified distributions (i.e. first time home buying, higher education expenses, medical expenses, any ABLE-eligible distributions, distributions to prevent foreclosure, or distributions to start a small business). No rollovers from a USAccount IRA are allowed.

The bill was referred to the House Committee on Ways and Means.

Summary: Congress.gov

Report: Retirement Security in Peril

On February 13, 2018 the Democrat members of the Joint Economic Committee released a report on the retirement landscape in the U.S. The report examines challenges working Americans face in planning and saving for retirement, including the shifting from defined benefit to defined contribution plans, insufficient access and participation in retirement savings plans, and the role of Social Security in retirement. The report calls for Congress to broaden access to low-cost, high-yield retirement savings options, strengthen Social Security, and secure pension plans.