Reps. Lisa Blunt Rochester, D-Delaware; Scott Peters, D-California; and Lucy McBath, D-Alabama, introduced the Saving for the Future Act, legislation to address the nation’s retirement savings crisis and help ensure that Americans are able to afford emergency expenses.
The Saving for the Future Act establishes a minimum employer contribution to a savings plan of 50 cents per hour worked, which equals $20 per week and more than $1,000 per year.
“Over the last 50 years, retirement savings have declined by a dramatic 75 percent, and stagnated wages and an ever-increasing cost of living pose real challenges to retirement security for all Americans. These are alarming trends that we must address so that everyone has the opportunity to retire in dignity,” said Blunt Rochester. “By helping families save for their future and ensuring that their retirement benefits are portable and accessible, we are meeting these challenges head-on and giving workers the tools to save and thrive in the new economy.”
Companion legislation was introduced in the Senate last week Sens. Chris Coons, D-Delaware, and Amy Klobuchar, D-Minnesota. The legislation is supported by the AARP, Service Employees International Union, the National Urban League, Prosperity Now, Third Way and Local Initiatives Support Corp.
At a time when three in 10 American workers lack access to workplace retirement plans and 45% do not participate in one, the Saving for the Future Act would help guarantee that all Americans — even those working part time — have some savings put away for retirement and emergency situations.
Under the Saving for the Future Act, men and women who work at a company with ten or more employees would be entitled to an employer savings contribution of at least 50 cents per hour worked into a savings plan, which could include existing plans, such as a 401(k). Employees at smaller companies would be able to save through federally provided UP Accounts, modeled after the Thrift Savings Plan for federal workers. UP Accounts would have low fees, could easily be transferred from job to job, and would be tailored to the employee’s age and savings needs.
Businesses of all sizes complying would receive tax credits to help fund these contributions, and small businesses with 15 or fewer employees would receive credits covering a full half of the required contributions. Independent workers and employees at the smallest companies would receive access to UP Accounts and an individual tax credit to help them contribute.
Read a summary of the bill at bit.ly/2UmjaFm.