Cassidy, Kaine Introduce Bipartisan Bill Improving Retirement Savings for Working Americans
WASHINGTON, D.C. – Today, U.S. Senators Bill Cassidy (R-LA), ranking member of the Senate Health, Education, Labor, and Pensions (HELP) Committee, and Tim Kaine (D-VA), a member of the Senate HELP Committee, introduced the Helping Young Americans Save for Retirement Act. The legislation would help more Americans ages 18 to 20 years old access employer-sponsored retirement plans by removing barriers that discourage companies from offering these benefits to younger employees.
“Americans who decide to enter the workforce instead of going to college should have every opportunity available to save for retirement,” said Dr. Cassidy. “This legislation increases those opportunities and empowers working Americans to plan for a secure retirement.”
“Young people who are starting out in their careers should be able to access employer-sponsored retirement plans like everyone else,” said Senator Kaine. “This bipartisan bill would help more Americans access critical retirement benefits and put them on a path to a better financial future.”
Specifically, the bill would lower the participation age of Employee Retirement Income Security Act of 1974 (ERISA)-covered defined contribution (DC) plans to 18 years old under certain circumstances, providing access to retirement savings plans for eligible workers in this age range who currently don’t have access to their employers’ plans. Covered plans would still be able to set a minimum age threshold up to 18 years old.
This legislation also removes costly provisions that would 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 pension. 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.
A 2021 report showed that 40 percent of workplaces only offer benefits to employees who are 21 years or older. Employees between the ages of 18 and 21 are missing out on additional savings and three years of compound interest.
The Helping Young Americans Save for Retirement Act is supported by the American Benefits Council, BPC Action, and LPL Financial Holdings Inc.
Full text of the bill is available here.