Legislation to create portable retirement and investment accounts for all Americans, whether they are working or not, was floated on Capitol Hill Tuesday.
The Portable Retirement and Investment Account Act, H.R. 6990, introduced by Rep. Jim Himes, D-Conn., would create an account at birth that would remain with the individual at any employer or while unemployed or self-employed.
“The idea behind PRIA is to create an account that is personalized and independent of your employment situation and managed the way you want by the people you want,” Himes said in a statement.
Americans can stick with their 401(k)s, IRAs or other savings accounts, then roll these into the portable vehicle when they change jobs, he explained.
Employers could contribute the same way they do with current retirement plans, but the owners could also help fund it themselves.
Account holders could move their account to their own financial institution or make choices from a slate of investment options.
PRIA would also create an independent board managed by certain financial institution representatives to oversee the accounts.
At retirement, Americans would “have just one vehicle to manage, invested the way they have chosen,” according to the vision statement for the new retirement savings vehicle.
Although the bill’s introduction comes late in the legislative calendar year, Himes’ office made clear in a release that this newly proposed system is only a “first step,” designed to “encourage discussion” to help bring forward the best possible plan.
The legislation itself is the result of several months of talks among financial services providers, senior advisors and retirement planning representatives, the release noted.
Himes’ statement cited various statistics to explain the need for such a vehicle, including data from the Bureau of Labor Statistics showing “more than half the country is not saving any money in a retirement account.”
Stakeholders in the retirement savings community are adopting a wait-and-see attitude.
“We will need to examine Rep. Himes’ bill with our members, but we certainly appreciate his effort to help address retirement security issues,” Dan Zielinski, spokesman for the Insured Retirement Institute, told ThinkAdvisor.
“In the meantime, we remain confident that the Senate will soon consider bipartisan retirement security legislation and then move quickly to resolve differences with the recent House-passed measure” — the Family Savings Act, H.R. 6757, which was part of Republicans’ recently passed Tax Reform 2.0 package — and “send a final bill to the White House this year.”
— Related on ThinkAdvisor: