Bonamici Introduces Bill to Help Every Worker Save for Retirement
WASHINGTON, DC [06/10/16] - With studies showing that more than one third of Americans have no retirement savings, Congresswoman Suzanne Bonamici (D-OR) and Congressman Jared Huffman (D-CA) today introduced the American Savings Account Act to provide American workers with a new tool to help them save for a strong and secure retirement. Modeled after similar programs in Oregon and California, the legislation would provide every American worker without access to an employer-sponsored savings plan with their own American Savings Account (ASA), a personal, pre-tax retirement savings plan. The Senate version of the American Savings Account Act was introduced by Senator Jeff Merkley (D-OR) on January 28, 2016.
Currently, 68 million Americans in the workforce are not offered retirement savings plans through their employer. In the 21st century economy, more workers switch jobs frequently and are less likely than in the past to be covered by a traditional employer-sponsored retirement savings plan, according to a recent study based on Census data.
“For the millions of Americans without retirement savings, the future can be uncertain,” said Congresswoman Bonamici. “Oregon leads the nation in helping all workers save for retirement and carry their savings from job to job. The American Savings Act will help working families around the country be more secure in their retirement by giving them the tools necessary to invest in their future, regardless of where they work.”
“We’re in the midst of a serious retirement savings crisis with too many American workers unable to save enough to meet their retirement goals and enjoy financial security,” said Congressman Huffman. “After working for a lifetime, all Americans have the right to retire in dignity. Our legislation, modeled after the great progress in California and Oregon, would ensure that every worker in America has access to high-quality savings options to provide them an income in retirement.”
Specifically this legislation would:
· Automatically enroll private sector workers whose employers do not currently provide qualified retirement savings plans in an American Savings Account;
· Ensure that all private sector workers, including full-time, part-time, and contract, have immediate access to a retirement savings account no matter the size of their employer;
· Enable workers to discontinue their participation, or to change their contribution level between 2% and 10% to be deposited in the ASA from each paycheck;
· Permit employers to provide tax-advantaged matching or non-matching contributions to employee ASA accounts; and
· Allow, but not require, self-employed individuals and 1099 independents to enroll in an ASA.
States like California and Oregon have already recognized the need to support their citizens’ ability to save for retirement and have moved forward with plans to establish state-wide retirement funds for all workers. In March 2016, the California Secure Choice Retirement Savings Investment Board recommended that the State Legislature establish the California Secure Retirement Plan, a 401(k)-like retirement plan managed by the state and available to private sector workers who do not have access to retirement savings plans through their employer. Oregon has taken similar steps to establish an Oregon Retirement Savings Plan. Congresswoman Bonamici and Congressman Huffman’s legislation includes many of the innovative policy recommendations currently moving forward in the two states.