Two Senators have reintroduced a bipartisan bill that would give workers who lack access to an employer-sponsored retirement plan access to a federal program similar to the Thrift Savings Plan.
Under the Retirement Savings for Americans Act, or RSAA, which Sen. John Hickenlooper, D-Colo., and Sen. Thom Tillis, R-N.C., reintroduced April 30, both full- and part-time workers would be eligible for the new program and would be automatically enrolled at a contribution rate of 3%, with the option to increase or decrease their withholding or opt out at any time.
The program would be modeled after the $937 billion Thrift Savings Plan, Washington, which serves as the retirement system for 7.3 million federal employees and members of the uniformed services.
Low- and moderate-income workers would be eligible for an automatic contribution of 1%, and they would be eligible to receive up to a 4% matching contribution in the form of a refundable tax credit.
“Roughly 50 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.”
Hickenlooper in the same announcement said the bill will help “low-income workers enjoy a secure retirement and fulfill their American dream.’’
Proponents of the bill, such as labor economist Teresa Ghilarducci and Kevin Hassett, President Donald Trump’s National Economic Council director, say it’s the missing piece in America’s retirement puzzle, as it will bring everyone without a plan into the wealth-building system.
Opponents, including the American Retirement Association, worry the bill will lead to fewer employers offering retirement plans, thereby undermining the nation’s retirement system.
Versions of the bill have been introduced in the previous two congressional sessions, most recently in October 2023. Rep. Lloyd Smucker, R-Pa., reintroduced the bill in the House earlier in April.
