WASHINGTON, D.C. – Senators Thom Tillis and John Hickenlooper (D-CO), alongside Representatives Lloyd Smucker (R-PA) and Terri Sewell (D-AL), recently introduced the Retirement Savings for Americans Act (RSAA),bipartisan legislation to help low- and middle-income Americans build wealth and save for retirement.

The bill would establish a new program allowing eligible workers access to portable, tax-advantaged retirement savings accounts. If passed, the RSAA would enable the federal government to match contributions for low- and middle-income workers, with the match beginning to phase out at median income.

“Roughly 40 million Americans lack access to an employer-sponsored retirement plan, which represents a significant roadblock to achieving financial security for their retirement,” said Senator Tillis. “The Retirement Savings for Americans Act tackles this problem by establishing a pathway for savings for Americans lacking retirement options.”

The Retirement Savings for Americans Act contains the following provisions:

• Eligibility and Auto Enrollment: Full- and part-time workers who lack access to an employer-sponsored retirement plan would be eligible for an account and automatically enrolled at 3% of their income. Workers could increase or decrease their withholding or opt-out at any time. Independent workers (including gig workers) would also be eligible.
• Federal Contribution: Low- and moderate-income workers would be eligible for a 1% automatic contribution (as long as they remain employed) and up to a 4% matching contribution via a refundable federal tax credit. This provision would begin to phase out at median income.
• Portability: Accounts would remain attached to workers throughout their lifetimes, and workers would be able to stop and start contributions at will.
• Private Assets: The accounts would be the worker’s property, and the assets could be passed down to future generations to help them build wealth and financial security.
• Investment Options: Much like the current Thrift Savings Plan, participants would be given a menu of simple, low-fee investment options, including lifecycle funds tied to a worker’s estimated retirement date or index funds made of stocks and bonds. 

View quotes of support from Charles Schwab and others HERE. 

View a one-page explainer of the bill HERE. 

Full text of the bill is available HERE. 

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