Democrats in the House of Representatives put forth legislation Friday seeking to promote universal retirement coverage for American workers by extending a retirement vehicle to those without access to a workplace savings plan.
The bill, called the American Savings Account Act, would automatically enroll all private-sector workers whose employers don't offer a qualified retirement savings plan into an American Savings Account (ASA), modeled after the Thrift Savings Plan available to federal employees.
Employees could opt out or change their contribution amount, and employers would be able to make tax-advantaged matching or non-matching contributions to employee accounts.
Co-sponsored by Jared Huffman (D-Calif.) and Suzanne Bonamici (D-Ore.), the bill is the House's version of similar Senate legislation introduced earlier this year. That bill, debuted in January, is the American Savings Act sponsored by Senator Jeff Merkley (D-Ore.).
“We're in the midst of a serious retirement savings crisis with too many American workers unable to save enough to meet their retirement goals and enjoy financial security,” said Rep. Huffman in a statement.
The bill comes as there's been momentum growing at the state and federal level for broader access to retirement savings. Rep. Huffman said the legislation is “modeled after the great progess in California and Oregon.”
Those states have been among those leading the charge with state-sponsored initiatives to close the retirement coverage gap, some of which take different forms such as an auto-IRA scheme or a virtual marketplace for employers to shop for retirement plans.
There's also been action at the federal level, including President Barack Obama's creation of a voluntary, starter savings program through the workplace called myRA. The president has also been a staunch supporter of establishing a federal auto-IRA scheme, but has been stonewalled due to political considerations.
Earlier this week, two senators at opposite ends of the political spectrum — Sen. Elizabeth Warren (D-Mass.) and Mike Lee (R-Utah) — introduced a bill to make it easier for graduate students to save for retirement.