117th Congress, 1st Session

Hearings

Legislative Proposals

National Savings Proposals

  • To view federal legislation proposing national savings solutions, see prior sessions.

Other Reform Proposals

Legislative Proposals

Portable Retirement and Investment Account Act of 2021

Introduced as H.R. 5334 by Representative James Himes (D-CT) on September 22, 2021.

This bill would establish Portable Retirement and Investment Accounts for every American at birth by providing a PRIAs at the same time one would receive a social security number. The accounts would be administered by an independent board appointed by the Treasury and Labor secretaries, the PBGC and the Consumer Financial Protection Bureau, and managed by selected financial institutions. After creation of the initial account, account holders would have the option to choose investment options from a qualified financial institution. There would be a “PRIA Basic” account, which would be the default option with a target date fund based on the year the beneficiary reaches age 65, and a “PRIA Choice” account with broader investment options.

Source; Congress.gov

Federal Universal Savings Access (part of Budget Reconciliation)

On Thursday, September 9, 2021, the House Ways and Means Committee began to mark up legislation under the budget reconciliation instructions. Part of this budget reconciliation includes proposals to strengthen retirement security by requiring employers without employer-sponsored retirement plans to automatically enroll their employees in IRAs or 401(k)-type plans and by making the Saver’s Credit refundable so that those without any income tax liability are eligible to receive the benefit in the form of a contribution to their retirement account.

See the press release, video of the Committee Markup and the bill.

Commission on Retirement Security Act of 2021

Introduced as S. 2603 by Senator Todd Young (R-IN) on August 4, 2021.

This bill would establish in the executive branch a “Commission on Retirement Security”. The Commission would conduct a comprehensive study of the state of retirement security in the United States and submit to Congress recommendations on how to improve or replace existing private retirement programs.

Source: Congress.gov

The Retirement Security Flexibility Act

Introduced as S. 2602 by Senator Todd Young (R-IN) on August 4, 2021.

This bill would give employers more flexibility when setting up 401(k) plans for their employees. The bill would adjust the existing automatic contribution safe harbor so the initial automatic enrollment amount would be at least 3% but not more than 10% and would make it easier for plan sponsors to implement automatic escalation of contributions.

Source; Congress.gov

Strengthening Financial Security Through Short-Term Savings Accounts Act of 2021

Introduced as S. 2601 by Senator Cory Booker (D-NJ) on August 4, 2021.

This bill would allow an employer to make available to employees a standalone, short-term savings account, using an automatic contribution arrangement. An employer that offers employees a short-term savings account shall deduct amounts from each participating employee’s wages and transfer such amounts to a savings account.

Source: Congress.gov

The Refund to Rainy Day Savings Act

Introduced as S. 2600 by Senator Cory Booker (D-NJ) on August 4, 2021.

This bill would allow participating taxpayers to build emergency savings during tax time by allowing filers to save a portion of their tax refund by deferring the payment of 20% of it to a later date and placing it into a “Refund to Rainy Day Savings Program” that would be established by the Treasury Department.

Source; Congress.gov

Employers Contribute to ABLE Accounts

Introduced as H.R. 4672 by Representative Tom Suozzi (D-NY) on July 22, 2021.

This bill would allow employers to contribute to ABLE accounts in lieu of retirement accounts. Information will be updated when it becomes available.

Source; Congress.gov

Encouraging Americans to Save Act

Introduced as S. 2452 by Senator Ron Wyden (D-OR) on July 22, 2021.

This bill would reform a tax credit into a federal matching contribution to middle- and low-income working Americans who contribute to a retirement savings account, whether they save at work through an employer-sponsored plan or on their own through an IRA. The program would offer matching contributions for the first time to millions of individuals not covered by an employer-sponsored retirement plan, including those who save through an IRA under a state or local government program, that automatically enrolls workers who do not have access to an employer-sponsored retirement plan.

Source: Congress.gov; See the bill summary.

Long-Term Care Affordability Act

Introduced as S. 2415 by Senator Patrick Toomey (R-PA) on July 21, 2021.

This bill would allow individuals to pay up to $2,500 each year for long-term care insurance from their 401(k)s, 403(b)s, and IRAs without a tax penalty.

Source: Congress.gov

Women’s Retirement Protection Act

Introduced as S. 2446 by Senator Patty Murray (D-WA) on July 22, 2021.

This bill would strengthen consumer protections to safeguard retirement savings, increase eligibility for employer-sponsored retirement savings plans for part-time workers, increase access to information about retirement and savings tools, and help women with low incomes and survivors of domestic abuse get the retirement benefits they are entitled to following a divorce.

Source: Congress.gov.

Keeping Your Retirement Act of 2021

Introduced as S.1959 by Senator John Kennedy (R-LA) on June 7, 2021.

This bill would increase the age for required mandatory distributions from retirement accounts. This would amend the Internal Revenue Code of 1986 by raising the age for required mandatory distributions from 72 to 75 years old.

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

Increasing Retirement Amount Act of 2021

Introduced as S.1961 by Senator John Kennedy (R-LA) on June 7, 2021.

This bill would amend the Internal Revenue Code of 1986 by allowing individuals who do not have access to a workplace retirement plan to save more of their money for retirement by increasing their IRA contribution limit from $6,000 to $12,000 per year. For individuals who are at least 50 years old and do not have a workplace retirement plan, the legislation would increase the IRA contribution limit to $15,000 per year.

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

Enhancing Emergency and Retirement Savings Act of 2021

Introduced by Senator James Lankford (R-OK) and Senator Michael Bennet (D-CO) on May 27, 2021, the bill (S.1870) encourages participation in retirement plans by giving individuals more flexibility and penalty-free access to funds should a family emergency hit, according to a press release from the office of Senator Lankford. The legislation would provide a penalty-free “emergency distribution” option from employer-sponsored retirement accounts and IRAs. One emergency distribution would be permitted per calendar year, which would be limited to amounts over $1,000, with an annual maximum withdrawal of $1,000. The legislation would require the individual to replenish the withdrawn amount back to the plan before an additional emergency distribution from that same plan is allowed.

See the press release from Senator Lankford. Information to be updated when available on Congress.gov.

Financial Factors in Selecting Retirement Plan Investments Act

Introduced by Senator Tina Smith (D-MN) on May 21, 2021, the bill (S.1762) “seeks to provide legal certainty to plans that choose to consider ESG factors in their investment decisions or offer ESG investments to plan participants.” It would amend ERISA to make clear plans can consider ESG factors; plans may consider ESG factors as tie-breakers when deciding between comparable options; and repeals the 2020 DOL rule on ESG investing.

See the bill summary from the office of Senator Smith. Information to be updated when available on Congress.gov.

Retirement Savings Lost and Found Act

Introduced by Senators Elizabeth Warren (D-MA) and Senator Steve Daines (R-MT), on May 21, 2021, the bill (S.1730) 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.

Previous versions of this bill were introduced in 2018 and 2016. Information to be updated when available on Congress.gov

Retirement Security and Savings Act

Introduced by Senator Rob Portman (R-OH) and Ben Cardin (D-MD) on May 21, 2021, the bill (S. 1770) according to a press release from Senator Cardin, includes the following proposed reforms:

  • It provides a tax credit for employers that offer these safe harbor plans starting at six percent of pay in addition to the existing safe harbor at three percent.
  • Increases the “catch-up” contribution limits from $6,000 to $10,000 for baby boomers (individuals over age 60) with 401(k) plans.
  • It allows employers to make a matching contribution to the employee’s retirement account based on his or her student loan payment.
  • Allows employers to make an additional contribution on behalf of employees in a small business SIMPLE retirement plan.
  • Increases the current law tax credit for the smallest businesses starting a new retirement plan to a larger percentage of their costs.
  • Simplifies rules for small businesses, including allowing all businesses to self-correct all inadvertent plan violations under the IRS’ Employee Plans Compliance Resolution System (“EPCRS”) without paying IRS fees or needing formal submissions to the IRS.
  • Establishes a new three-year, $500 per-year tax credit for small businesses that automatically re-enroll plan participants into the employer plan at least once every three years.
  • Expands the existing Saver’s Credit income thresholds to give more Americans access to increased credit amounts and creates a new “government match” for low-income savers by making the Saver’s Credit directly refundable into a retirement account.
  • Expands the eligibility of 401(k)s to include part-time workers that complete between 500 and 1,000 hours of service for two consecutive years.
  • Make it easier for employees to find lost retirement accounts by creating a national, online database of lost accounts.
  • Raising the age for required minimum distributions from age 72 to age 75 by 2032, allowing all individuals choosing to work later in life to keep saving for retirement.
  • Creates an exception from required minimum distributions for individuals with $100,000 or less in aggregate retirement savings, allowing them to choose to keep saving for retirement at any age.
  • Reduces the current penalty for failing to take required minimum distributions from 50 percent of the shortfall amount to 25 percent in most cases, and as low as 10 percent, if you self-correct.
  • Encourages expanded use of Qualifying Longevity Annuity Contracts (QLACs), for retirement plans that provide annual payments to individuals who outlive their life expectancy. QLACs prevent older Americans from outlasting their savings.

Previous versions of this bill were introduced in 2019 and 2018. Information to be updated when available on Congress.gov.

Improving Access to Retirement Savings Act

Introduced by Senator Chuck Grassley (R-IA), Senator James Lankford (R-OK) and Senator Maggie Hassan (D-NH) on May 19, 2021, the bill (S.1703) encourages more groups to participate in multiple employer plans (MEPs), such as 403(b) plans.  It allows small employers that join a MEP, regardless of how long the MEP has existed, to take the small employer pension start up credit. The bill also allows a grace period to correct reasonable errors in administering automatic enrollment and escalation features when groups are enrolling in the MEP.

See the press release from the office of Senator Grassley. Information to be updated when available on Congress.gov.

Securing a Strong Retirement Act of 2021

Introduced as H.R. 2954 by Representative Richard E. Neal (D-MA) and Representative Kevin Brady (R-TX) on May 3, 2021. This bill closely follows the prior version as H.R. 8696 introduced on October 27, 2020.  The bill was marked up in Committee on May 5, 2021.

This bill builds on the Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019 to further improve workers’ long-term financial wellbeing. This bill would:

  • Promote savings earlier for retirement by enrolling employees automatically in their company’s 401(k) plan, when a new plan is created;
  • Create a new financial incentive for small businesses to offer retirement plans;
  • Increase and modernize the existing federal tax credit for contributions to a retirement plan or IRA (the Saver’s Credit);
  • Expand retirement savings options for non-profit employees by allowing groups of non-profits to join together to offer retirement plans to their employees;
  • Offer individuals 60 and older more flexibility to set aside savings as they approach retirement;
  • Allow individuals to save for retirement longer by increasing the required minimum distribution age to 75;
  • Allow individuals to pay down a student loan instead of contributing to a 401(k) plan and still receive an employer match in their retirement plan;
  • Make it easier for military spouses who change jobs frequently to save for retirement;
  • Allow individuals more flexibility to make gifts to charity through their IRAs;
  • Allow taxpayers to avoid harsh penalties for inadvertent errors managing an IRA that can lead to a loss of retirement savings;
  • Protect retirees who unknowingly receive retirement plan overpayments; and
  • Make it easier for employees to find lost retirement accounts by creating a national, online, database of lost accounts.

See bill summary prepared by the Groom Law Group. Source: Congress.gov.

SIMPLE Plan Modernization Act

Introduced as S. 1272 by Senator Susan M. Collins (R-ME) and Senator Mark R. Warner (D-VA) on April 21, 2021.

This bill would:

  1. Raise the contribution limit for SIMPLE plans from $13,500 to $16,500 (halfway between current SIMPLE plans and traditional 401(k)s) for the smallestbusinesses (1 to 25 employees), with a corresponding increase in the catch-up limit from $3,000 to $4,750.
  2. Give businesses with 26 to 100 employees the option of the higher contribution limits, and, in order to continue to encourage them to transition to 401(k)s when they can do so, increase their SIMPLE plan mandatory employer contribution requirements by one percentage point if they elect the higher limits.
  3. Allow for a reasonable transition period for employers that grow beyond 25 employees.
  4. Make the limit increases unavailable if the employer has had another defined contribution plan within the past three years (to encourage businesses that already have qualified plans to retain them).
  5. Modernize SIMPLE plan form filing requirements and modify the transition rules from SIMPLE plans to traditional plans to facilitate and encourage such transitions.
  6. Direct Treasury to study the use of SIMPLE plans and report to Congress on such use, along with any recommendations.

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