Senators reintroduce the Security and Retirement Savings Act
The latest congressional bill to help boost Americans’ retirement savings is the Retirement Security and Savings Act, which aims to save people more money and help small businesses offer 401 (k) and other retirement plans, among other things.
The bill was introduced by US Senators Ben Cardin, D-Maryland, and Rob Portman, R-Ohio, and comes a week after Senator Chuck Grassley, R-Iowa; Maggie Hassan, D-New Hampshire; and James Lankford, R-Oklahoma, introduced the Improved Access to Retirement Savings Act. And earlier this month, the House Ways and Means Committee unanimously passed the Strong Retirement Protection Act 2021, also known as the âSecure Act 2.0â.
Cardin and Portman introduced the Retirement Security & Savings Act, also known as the Portman-Cardin Bill, in previous sessions of Congress.
The bill seeks to encourage employers to offer a more generous automatic enrollment plan and to benefit from protection against costly pension rules. It also offers a tax credit to employers who offer safe harbor plans starting at 6% of salary in addition to the existing safe harbor of 3%. And for retirees who have fallen behind in their retirement savings, the bill would increase “catch-up” contribution limits to $ 10,000, compared to $ 6,000 for people with 401 (k) plans who have more. 60 years old.
Additionally, the proposed legislation would seek to help employees trying to save for retirement while paying off their student loans by allowing employers to match workers’ retirement accounts based on their student loan payment.
It would also establish a tax credit of $ 500 per year over three years for small businesses that automatically re-enroll plan members in the employer’s plan at least once every three years, and it would expand the eligibility of employees. 401 (k) to include part-time workers who complete between 500 and 1000 hours of service for two consecutive years.
“This bipartisan legislation includes sweeping reforms to help Americans save more for retirement by allowing people who have too little saved to set aside more for retirement, helping small businesses to offer 401 (k) and d ” other retirement plans, by expanding access to retirement savings plans. for low-income Americans without coverage, and providing more certainty and flexibility during Americans’ retirement years, âPortman said in a statement.
Senators cited a Government Accountability Office (GAO) report that nearly half of all near-retirees over age 55 have no retirement savings, and a Bureau of Labor Statistics (BLS ) who found only 49% of private sector workers at smaller companies and 39% of part-time workers have access to an employer-sponsored plan. They also said that only 22% of working low incomes currently participate in a pension plan.
The bill is supported by the American Benefits Council, AARP and the Insured Retirement Institute (IRI), among several other associations and institutional investors, including T. Rowe Price, Vanguard and TIAA.
Other provisions of the bill include:
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Keywords: 401 (k), Ben Cardin, Improved Access to Retirement Savings Act, Retirement Savings and Security Act, Rob Portman, SECURE Act 2.0, Securing a Strong Retirement Act of 2021