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Retirement Planning > Saving for Retirement

Bill to Create U.S.-Run Retirement Accounts Is Back

By Melanie Waddell

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Lawmakers reintroduced late Thursday the Retirement Savings for Americans Act, which would create Roth IRA-style retirement accounts for workers without access to employer-sponsored retirement plans.

The bill was introduced by Sens. John Hickenlooper, D-Colo., and Thom Tillis, R-N.C., and Reps. Lloyd Smucker, R-Pa., and Terri Sewell, D-Ala.

It would establish a new program to give eligible workers access to portable, tax-advantaged retirement savings accounts.

The bill was first floated last December.

If passed, the “RSAA would allow the federal government to match contributions for low- and middle-income workers, with the match beginning to phase out at median income,” according to the lawmakers.

“Roughly 40 million Americans lack access to an employer-sponsored retirement plan, which represents a significant roadblock to achieving financial security for their retirement,” Tillis said in a statement. “The Retirement Savings for Americans Act tackles this real problem by establishing a pathway for savings for Americans lacking retirement options.”

Key features of the bill include:

Eligibility and Auto-Enrollment: Full- and part-time workers who lack access to an employer-sponsored retirement plan would be eligible for an account, and they would be automatically enrolled at 3% of their income. They could choose to increase or decrease their withholding, or opt out entirely at any time. Independent workers (including gig workers) would also be eligible.

Federal Contribution: Low- and moderate-income workers would be eligible for a 1% automatic contribution (as long as they remain employed) and up to a 4% matching contribution via a refundable federal tax credit. This would begin to phase out at median income.

Portability: Accounts would remain attached to workers throughout their lifetimes, and workers would be able to stop and start contributions at will.

Private Assets: The accounts would be the property of the worker and the assets could be passed down to future generations.

Investment Options: Much like the current Thrift Savings Plan, participants would be given a menu of simple, low-fee investment options to choose from, including lifecycle funds tied to a worker’s estimated retirement date, or index funds made of stocks and bonds.

Melanie Waddell

@Think_MelanieW

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