Legislation to create a federal retirement plan for workers whose employers do not offer a retirement plan was introduced last month in both the House and Senate. S.1526 was introduced by Sens. John Hickenlooper (D-CO) and Thom Tillis (R-SC). Reps. Lloyd Smucker (R-PA) and Terri Sewell (D-AL) introduced the companion bill, H.R.2696, in the House.

The Retirement Savings for Americans Act (RSAA) would create a federal retirement plan that would include a U.S.-paid matching contribution for low-and middle-income workers who participate in the plan. The federal match rate would be at one percent for non-elective contributions with a four percent safe harbor.

Prospects: The RSAA was first introduced late in 2022, and then reintroduced in 2023. It failed to gain traction then, and appears headed for failure to catch much if any Congressional interest now. It is strenuously opposed by many in the private retirement savings community, based on fears that it would encourage private sector employers to drop (or fail to establish) retirement savings plans, many of which are more generous than the federal plan contemplated in S.1526/H.R.2696. There is also a revenue loss issue that could prevent consideration of this legislation any time soon.

NAIFA Staff Contact: Jayne Fitzgerald – Director – Government Relations, at jfitzgerald@naifa.org.