New Bill Would Create Portable Retirement and Investment Accounts
Under the Portable Retirement and Investment Account Act, every American would receive an account when they get a Social Security number.
Rep. Jim Himes, D-Conn., and Sen. Mark Warner, D-Va., on Wednesday introduced the Portable Retirement and Investment Account (PRIA) Act of 2021, which would create “universal, portable” retirement and investment accounts.
“The current retirement system isn’t working for all Americans,” Himes said in a statement. “The options to which American workers have access can differ significantly based on their area of employment and the systems can be needlessly confusing. In addition, many Americans lose access to retirement savings vehicles if they lose their jobs, and gig, contract, and part-time workers are often ineligible. PRIA changes all of this.”
According to the bill, every American would receive a PRIA when they receive a Social Security number.
PRIAs would be administered by an independent board appointed by the Labor and Treasury secretaries, as well as the Pension Benefit Guaranty Corp. and the Consumer Financial Protection Bureau and managed by selected financial institutions.
“After the creation of the initial account, account holders will have the option to choose investment options from a qualified financial institution,” the lawmakers explained. “Employers can contribute to their employee’s PRIA just like legacy plans like 401(k)s, but employees who separate from their employer will still have the ability to contribute to the same PRIA plan as before.”
Americans who want to keep their 401(k)s, IRAs and other savings plans would still have those options. ”PRIAs are designed to supplement the existing system and provide a simple, portable option for those who want it,” the lawmakers said.
Warner added that Americans “are more likely to change jobs and be engaged in non-traditional forms of work than they were a generation ago, but our policies haven’t kept up with these shifts. As more and more Americans hold multiple jobs across a career, a year, and even a day, PRIA will provide more workers with access to flexible, portable benefits such as retirement savings that will carry with them from employer to employer and gig to gig.”
The lawmakers said Congress “needs to act to bring more people into the system and make it easier for Americans to save.”