WASHINGTON – Today, U.S. Senators Bill Cassidy (R-LA), chair of the Senate Health, Education, Labor, and Pensions (HELP) Committee, and Tim Kaine (D-VA), a member of the Senate HELP Committee, reintroduced the Helping Young Americans Save for Retirement Act. The legislation would help more Americans aged 18 to 20 years old access employer-sponsored retirement plans by removing barriers that discourage companies from offering these benefits to younger employees.
“Americans who don’t attend college and immediately enter the workforce should be given every chance to save for retirement,” said Dr. Cassidy. “This legislation empowers American workers, giving them more opportunities to plan for a secure retirement.”
“Contributing to a retirement plan early on sets people up for financial security in the future,” said Senator Kaine. “I’m proud to introduce this bipartisan bill that would ensure younger workers have access to their employer-sponsored retirement benefits when they are starting out in their careers.”
Specifically, the bill would lower the participation age of Employee Retirement Income Security Act of 1974 (ERISA)-covered defined contribution (DC) plans to 18 years old under certain circumstances, providing access to retirement savings plans for eligible workers in this age range who currently don’t have access to their employers’ plans. Covered plans would still be able to set a minimum age threshold up to 18 years old.
This legislation also removes costly provisions that would otherwise make covering younger workers expensive. Specifically, the bill delays ERISA provisions that require businesses to undergo mandatory audits if they allow employees under the age of 21 to start contributing to their pension. The legislation also exempts 18 to 20-year-old employees from testing related to retirement funds that would otherwise increase the cost of administering retirement plans for these employees.
The Helping Young Americans Save for Retirement Act is supported by BPC Action, Edward Jones, the American Benefits Council, LPL, Insured Retirement Institute, the National Rural Electric Cooperative Association, TIAA, and Transamerica.
“The Helping Young Americans Save for Retirement Act will expand the opportunity for more younger workers to start saving earlier for retirement by allowing them to participate in their employer-sponsored workplace plans,” said Paul Richman, Chief Government and Political Affairs Officer at the Insured Retirement Institute. This measure will not only help younger workers get into the habit of contributing to their retirement savings, but it will also provide additional years for their savings to grow to ensure a more secure financial future.”
Read the full bill text here.
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