Senate Democrats Propose Retirement Savings Legislation for Working Families

The bill would add federal matching contributions for middle-to-low-income class employees, whether enrolled in an employer-sponsored retirement program or not. 

Senate Democrat finance committee ranking members have introduced a new bill designed to support working families and middle-to-low-class Americans saving for retirement.

The legislation—called the Encouraging Americans to Save Act (EASA)—restores the retirement savings program myRA, which the Trump administration eliminated  in July of 2017, citing a lack of cost-effectiveness. Established in 2014 by the Obama administration, myRA was created to produce starter retirement savings account for those without access to a 401(k) plan at work.

According to the proposed bill, EASA would also “reform a tax credit into federal matching contributions,” for working class Americans contributing to a retirement savings account, whether that’s through an employer savings program or an individual retirement account (IRA). Additionally, the bill would offer matching contributions to those without an employer-sponsored program, including those enrolled in IRAs or local government programs. The proposal says EASA would replace the Saver’s Credit with a 50% government match on contributions of up to $1,000 per year, made to 401(k)-type plans and IRAs by employees with a maximum income of $32,000 or couples with a combined maximum income of $65,000.

Other Senate Democrats who helped form the bill include Senator Ben Cardin, D-Maryland; Bob Casey, D-Pennsylvania; Amy Klobuchar, D-Minnesota; and Michael Bennet, D-Colorado.

More information about the bill can be found here.