EconomyAugust 20, 2021

Senators Reintroduce Bills to Bolster Retirement Savings

The four bipartisan bills are sponsored by Sens. Cory Booker and Todd Young.

Reported by Michael Katz

US Sens. Cory Booker, D-New Jersey, and Todd Young, R-Indiana, have reintroduced four bipartisan bills they say will help increase retirement security for individuals and families.

The bills are The Refund to Rainy Day Savings Act and the Strengthening Financial Security Through Short-Term Savings Accounts Act, which Booker reintroduced; and the Retirement Security Flexibility Act and the Commission on Retirement Security Act, which Young reintroduced.

The Refund to Rainy Day Savings Act would allow individuals to build emergency savings during tax season by letting them save some of their tax refunds for “rainy day” or long-term savings through a program that would be created by the Treasury Department.

The Strengthening Financial Security Through Short-Term Savings Accounts Act would enable employers to enroll employees in short-term savings accounts that are funded using automatic contributions deducted from participating employees’ wages. For each pay period, the employer would be required to transfer to the account an amount equal to a percentage of the employee’s compensation or a fixed amount, as determined by the employer.

Employees would be allowed to adjust, stop, or pause their contributions, and the balance in an account would not be able to exceed $10,000 (adjusted annually for inflation) and must be made readily available to the employee at all times.

“It’s essential that we provide workers with the tools they need to build savings,” Booker said in a statement. “These bipartisan bills will help boost savings, getting workers back on a track to financial stability and a financially secure retirement.”

The Retirement Security Flexibility Act would expand access to workplace retirement plans by giving employers more flexibility when setting up 401(k) plans for their employees. Young says the bill would also make it easier for savers to automatically enroll in long-term savings plans and more quickly grow their savings.

And the Commission on Retirement Security Act would create a federal retirement commission called the Commission on Retirement Security that would conduct a comprehensive study of the state of retirement security in the US and submit to Congress recommendations on how to improve or replace existing private retirement programs.