Klobuchar, Coons introduce retirement savings improvement act
Sen. Amy Klobuchar, D-Minn., and Sen. Chris Coons, D-Del., Thursday, April 4, introduced the Saving for the Future Act, legislation to address a looming retirement savings crisis and help ensure that Americans are able to afford emergency expenses.
Like the minimum wage, the Saving For the Future Act establishes a minimum employer contribution to a savings plan of 50 cents per hour worked, which equals $20 per week and more than $1,000 per year.
"Hardworking families in America often don't have enough money in their savings account for an emergency—let alone retirement down the road," Klobuchar said in a news release. "The Saving for the Future Act will help close the wealth gap, prepare families in case of an emergency, and set workers up for a successful retirement."
"Right now, a full third of non-retirees have zero retirement savings, and 4 in 10 adults don't have enough cash savings to meet a $400 emergency expense. That's a crisis, and it's proof that while parts of our economy are strong, many Americans are still being left behind," Coons stated in the release. "By establishing a minimum savings contribution for the American worker, we can ensure that Americans working hard to pay their bills have savings in place to eventually retire and to deal with emergency expenses along the way.
"We need big, bold proposals to make our economy work for everyone—not just a few wealthy people at the top—and I believe this bill can not only create that change, but also has a chance of actually becoming law."
Under the Saving for the Future Act, men and women who work at a company with 10 or more employees would be entitled to an employer savings contribution of at least 50 cents per hour worked into a savings plan, which could include existing plans, such as a 401(k).
Employees at smaller companies would be able to save through federally provided "UP Accounts," modeled after the popular Thrift Savings Plan for federal workers. UP Accounts would have low fees, could easily be transferred from job to job, and would be tailored to the employee's age and savings needs.
Businesses of all sizes complying would receive tax credits to help fund these contributions, and small businesses with 15 or fewer employees would receive credits covering a full half of the required contributions. Independent workers and employees at the smallest companies would receive access to UP Accounts and an individual tax credit to help them contribute.