Compliance December 9, 2022

Bipartisan Group Introduces Bill for Portable Federal Retirement Accounts

Legislation would establish a new program to give eligible workers access to portable, tax-advantaged accounts.

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U.S. Senators John Hickenlooper and Thom Tillis and Representatives Terri Sewell and Lloyd Smucker Friday introduced the Retirement Savings for Americans Act, to create a program that would give American workers access to portable, tax-advantaged retirement savings accounts, with federal matching contributions for certain low- and middle-income workers.

The proposed savings program would offer investments similar to those offered to federal and military workers in the Federal Retirement Thrift Savings Plan. The proposed bill anticipates providing a menu of low-fee investment options, including target date funds tied to a worker’s estimated retirement date and stock and bond index funds, according to information from Hickenlooper’s office. The federal match would be a federal income tax credit, according to the draft bill. The federal match would be a federal income tax credit, according to the draft bill.

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Smucker, R-Pennsylvania, said the bill is intended to advance the pending SECURE 2.0 legislative package and build on it when the Retirement Savings for Americans Act is reintroduced in the next Congress.

“Too many Americans are working their entire adult lives only to reach retirement and find they don’t have enough saved,” Hickenlooper, D-Colorado, said in a release. “Helping people save is an easy, efficient way to cut income inequality while making sure all workers get the retirement they’ve earned.”

Co-sponsor Tillis, R-North Carolina, added, “Roughly 40 million Americans lack access to an employer-sponsored retirement plan, which represents a significant roadblock to achieving financial security for their retirement.”

Sewell, D-Alabama, and Smucker are co-sponsors in the House.

“This critical, bipartisan legislation would address serious gaps in our retirement system and make it easier for low- and middle-income workers to save for retirement,” Sewell said in the statement.

This legislation is aimed at providing retirement savings accounts to the up to 60% of U.S. workers that lack access to an employer-sponsored retirement plan, according to information from Hickenlooper’s office.

Many states have launched state-sponsored programs to enable workers without access to an employer-sponsored plan to save. In recent years, workers have saved more than $574 million through such state programs, according to information from the Center for Retirement Initiatives at Georgetown University. The largest state-sponsored programs are CalSavers, OregonSaves and Illinois Secure Choice. Overall, there are 16 state-sponsored programs and two city-sponsored programs.

The state and local programs do not offer matching contributions.

Information provided by Hickenlooper’s office says the federal 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 they would be automatically enrolled at 3% of their income. They could choose to increase or decrease their withholding or opt out entirely 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 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 property of the worker, 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 to choose from, including lifecycle funds tied to a worker’s estimated retirement date and index funds made of stocks and bonds.
    Compliance December 9, 2022

    LPL Advisers Overwhelmingly Support SECURE 2.0 Even as Timeline for Passage Tightens

    On the same day Senator Rob Portman, a retirement-legislation leader, gave his farewell speech, a survey from the massive independent broker/dealer shows the majority of its advisers support the passage of SECURE 2.0 this year.

    Reported by


    More than 95% of LPL Financial advisers support the passage of retirement legislation dubbed SECURE 2.0, even as time gets tight for its related bills to pass, according to a survey released Thursday.

    The survey of more than 600 LPL-affiliated financial advisers around the country found that most agreed that passing three retirement-related bills—Securing a Strong Retirement Act, the RISE & SHINE Act and the Enhancing American Retirement Now (EARN) Act—would help alleviate challenges that individuals face when saving for retirement.

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    “This legislation may unlock significant retirement options for small businesses and their employees,” Dan Arnold, LPL’s president and CEO, said in a press release. “It’s also very timely, given the impact that the pandemic has had on many Americans’ retirement savings.”

    The survey results came out on the same day retirement reform champion Senator Rob Portman, R-Ohio, gave his farewell address ahead of retiring from Congress when the current legislative session ends on January 3.

    Senator Ben Cardin, D-Maryland, co-sponsor with Portman of the EARN Act with Portman, expressed concern last week during a retirement summit that SECURE 2.0 may fail to pass not due to the substance, but because there is not enough time.

    Cardin explained at the time that they are looking for “a vehicle” (most likely a must-pass budget bill) to get the legislation passed, such as an end-of-year omnibus spending bill. Cardin also encouraged those in attendance at the summit to reach out to their legislators and tell them to pass SECURE 2.0.

    Tax Credits, Less Paperwork

    The LPL survey results, which included commentary from both Cardin and Portman, reiterates that advisers are for the most part behind the legislation.

    The three bills that make up SECURE 2.0 aim to expand access to employer-sponsored retirement plans through a range of provisions, such as allowing student debt payments to be matched as employer retirement contributions, providing tax incentives to businesses to start plans and creating emergency savings accounts. LPL advisers were largely supportive of specific provisions within the bills.

    The most support (94%) was given to a House provision that provides an additional small business start-up credit based on the contributions made by the employer, LPL said. The second-highest level of support (91%) went to allowing retirement plans to self-correct inadvertent errors without a submission to the IRS.

    After that, support came in at 81% for expansion of the Saver’s Credit as a means to increase retirement savings among low- and middle-income individuals. Seventy-nine percent believe small businesses that make military spouses immediately eligible and vested in their plan should be entitled to a tax credit to cover the added cost.

    Finally, 74% believe allowing part-time employees into a plan after two years, instead of three, as proposed in all three bills, would help close the coverage gap.

    If SECURE 2.0 does not pass this year, the legislation must be re-proposed in both houses. Legislators would be free to borrow from the old text, but restarting the process may create further delay.

    After Portman’s farewell speech on Thursday, the Insured Retirement Institute issued a statement thanking him for his efforts related to retirement reform, including his work in passage of the original Setting Every Community Up for Retirement Enhancement (SECURE) Act in 2019.

    “It would be a fitting end to [Portman’s] illustrious public-service career for Congress to pass this critical legislation before adjourning for the year,” said Wayne Chopus, president and CEO of IRI, in the statement.

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