New Bill Would Make Employer Retirement Contributions Mandatory
Key Points
- A new congressional proposal, the “Saving for the Future Act,” would require most employers to contribute to their workers’ retirement savings.
- The bill includes a provision for an integrated emergency fund, prioritizing the first $2,500 of savings for accessible use before long-term investment.
- The legislation faces an uncertain future, as a similar version of the bill failed to advance in a previous session of Congress.
A new congressional proposal, the “Saving for the Future Act,” would require most employers to contribute to their workers’ retirement savings, creating a new financial safety net for millions.
A crisis of savings: The legislation tackles a nationwide retirement crisis where nearly a third of the workforce lacks access to a workplace plan. “Today’s cost of living crisis means most Americans aren’t able to put enough money away for retirement or protect their families from unexpected emergency costs,” said co-sponsor Rep. Scott Peters in a statement.
An emergency buffer: The bill proposes portable “UP Accounts” for smaller employers, with a key feature being an integrated emergency fund. All initial savings—up to $2,500—are prioritized for an accessible savings account before any money is allocated to long-term retirement.
An uphill battle: The legislative push isn’t new; a similar version of the bill failed to advance during the 2019-2020 session. Despite backing from groups like AARP, its prospects remain uncertain in a Republican-controlled Congress.
The “Saving for the Future Act” isn’t an entirely new concept; the bill is patterned after a similar government-established program in the UK. But if passed, the new bill would mark the biggest shift in U.S. retirement policy since the rise of the 401(k), moving some of the savings burden from individuals back to employers.
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TL;DR
- A new congressional proposal, the “Saving for the Future Act,” would require most employers to contribute to their workers’ retirement savings.
- The bill includes a provision for an integrated emergency fund, prioritizing the first $2,500 of savings for accessible use before long-term investment.
- The legislation faces an uncertain future, as a similar version of the bill failed to advance in a previous session of Congress.
A new congressional proposal, the “Saving for the Future Act,” would require most employers to contribute to their workers’ retirement savings, creating a new financial safety net for millions.
A crisis of savings: The legislation tackles a nationwide retirement crisis where nearly a third of the workforce lacks access to a workplace plan. “Today’s cost of living crisis means most Americans aren’t able to put enough money away for retirement or protect their families from unexpected emergency costs,” said co-sponsor Rep. Scott Peters in a statement.
An emergency buffer: The bill proposes portable “UP Accounts” for smaller employers, with a key feature being an integrated emergency fund. All initial savings—up to $2,500—are prioritized for an accessible savings account before any money is allocated to long-term retirement.
An uphill battle: The legislative push isn’t new; a similar version of the bill failed to advance during the 2019-2020 session. Despite backing from groups like AARP, its prospects remain uncertain in a Republican-controlled Congress.
The “Saving for the Future Act” isn’t an entirely new concept; the bill is patterned after a similar government-established program in the UK. But if passed, the new bill would mark the biggest shift in U.S. retirement policy since the rise of the 401(k), moving some of the savings burden from individuals back to employers.