Two senators on Nov. 15 introduced a bipartisan bill that would provide more Americans ages 18 to 20 with access to employer-sponsored retirement plans.
Sen. Bill Cassidy, R-La., ranking member of the Health, Education, Labor, and Pensions Committee, and Tim Kaine, D-Va., a member on the same committee, introduced the Helping Young Americans Save for Retirement Act.
The bill would lower the age for employees to participate in ERISA-covered defined contribution plans to 18 from 21.
The legislation would also remove provisions that 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 retirement account. 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, according to an accompanying news release.
"Americans who decide to enter the workforce instead of going to college should have every opportunity available to save for retirement," Cassidy said in the news release. "This legislation increases those opportunities and empowers working Americans to plan for a secure retirement."
According to the Plan Sponsor Council of America's most recent annual survey cited by the senators, 40% of plans currently have a minimum age requirement of 21. In contrast, the rest have an age 18 minimum or no minimum age requirement, according to the PSCA.
"Young people who are starting out in their careers should be able to access employer-sponsored retirement plans like everyone else," Kaine said in the release. "This bipartisan bill would help more Americans access critical retirement benefits and put them on a path to a better financial future."
