The bipartisan legislation aims to help close the $7.7 trillion retirement savings gap Americans need for a comfortable retirement
Washington, D.C. — In an effort to make it easier for Americans to save the money they will need for retirement, U.S. Senators Susan Collins (R-ME), the Chairman of the Senate Aging Committee, and Maggie Hassan (D-NH) introduced the Retirement Security Act of 2019 today. Their bipartisan legislation would help small businesses offer retirement plans to their employees and encourage individuals to save more for retirement.
“As the Chairman of the Senate Aging Committee, ensuring that more people are better prepared for retirement is one of my top priorities,” said Senator Collins. “Our bipartisan legislation would significantly improve the financial security of many Americans by reducing the cost and complexity of retirement plans, especially for small businesses, and encourage individuals to save more for retirement.”
“Research has shown that there is a significant gap between what people need to maintain their standard of living after retirement and what they actually have, and we must do more to help workers close that gap,” Senator Hassan said. “By giving more small businesses the support that they need to provide retirement plans to their employees and encouraging people in the workforce to save more for retirement, this bipartisan bill is an important step toward providing a secure retirement for more of our workers.”
According to the non-partisan Center for Retirement Research, there is an estimated $7.7 trillion gap between the savings American households need to maintain their standard of living in retirement and what they actually have. A recent Gallup poll found that only 54 percent of working Americans believe that they will have enough money to live comfortably in retirement.
The Retirement Security Act of 2019 would address this issue by:
- Enabling more businesses to join multiple employer plans (MEPs) to offer retirement programs to their employees. The bill would allow businesses to share the administrative burden of a retirement plan, which helps lower costs, without requiring a connection, or “nexus,” between them.
- Making MEPs a more attractive option for small businesses. The bill would protect members of a MEP from losing their tax benefits if one employer in a MEP fails to meet the minimum criteria necessary for retirement plans to obtain tax benefits.
- Reducing the cost of maintaining a retirement plan. The bill would direct Treasury to simplify, clarify, and consolidate required notices to lessen costs.
- Encouraging those still in the workforce to save more for retirement. The bill would simplify compliance for small businesses that choose to provide employees with employer matches on contributions up to 10 percent of pay, encouraging more generous retirement contributions by businesses.
Following a push by Senator Collins, the President signed an executive order in August 2018 directing the U.S. Department of Labor and the U.S. Department of Treasury to consider issuing regulations and guidance that would make it easier for businesses to offer association retirement plans, also known as multiple employer plans.