A new Senate bill, S.2512, would permit employers to automatically enroll existing workers (who had initially opted out) into their employer-sponsored retirement plans every three years. The reenrollment would be subject to the worker’s ongoing ability to continue to opt out.
The Auto Reenroll Act of 2023 was introduced by the ranking member of the Senate Health, Education, Labor, and Pensions (HELP) Committee, Sen. Bill Cassidy (R-LA). His Democratic cosponsor is Sen. Tim Kaine (D-VA).
The bill is aimed at encouraging workers who initially opted out of participating in their employer plans to reevaluate their participation decision as their incomes increase. This would also apply to increasing the percentage of salary to be deferred into a retirement plan.
S.2512 would amend ERISA safe harbors and also retirement tax rules to “sweep as a group” all their workers who meet the requirements for reenrollment, rather than on each worker’s individual enrollment date. Further, employers would not be required to offer reenrollment opportunities to workers already participating in the employer plans.
“With over half of all Americans are not on track for retirement and other safety nets like Social Security on track to go insolvent, we are in a retirement crisis,” said Sen. Cassidy. “Auto-reenrollment puts workers in the better position to prepare for retirement while staying in control of their financial decisions.” Sen. Kaine added, “Many Americans have the option to enroll in employer-sponsored retirement plans, but they do not take advantage of this benefit and miss out on critical retirement contributions from their employers. “I’m proud to introduce this bipartisan bill to help more Americans take advantage of the retirement benefits offered to them and be on better financial footing.”
Prospects: This legislation has a good chance for enactment if any bill other than the hotly controversial government funding bill, farm bill, or FAA bill can be enacted. It also has some chance for being added to one of those bills, but it’s more likely that this bill will wait for consideration next year.
NAIFA Staff Contact: Jayne Fitzgerald – Director – Government Relations, at jfitzgerald@naifa.org.
