Senators Cory Booker (D-NJ) and Todd Young (R-IN) reintroduced four bills in the Senate this week designed to address retirement security.
The Refund to Rainy Day Savings Act, originally proposed by Senator Booker in 2019, would permit taxpayers to defer 20 percent of their income tax refund into a “Rainy Day Fund” established by the Secretary of the Treasury. Representative Bonnie Watson Coleman (D-NJ-12) is introducing a companion bill in the House of Representatives.
Senator Booker also introduced the Strengthening Financial Security Through Short-Term Savings Accounts Act of 2021, which was previously proposed by various Senators in prior sessions of Congress. This bill would permit employers to establish stand-alone, short-term savings accounts with automatic contribution arrangements. The account balance will not be permitted to exceed $10,000, adjusted for inflation, and employers will be permitted to establish these accounts in conjunction or coordination with their tax-qualified plan or arrangement.
The Retirement Security Flexibility Act of 2021, previously proposed by Senator Young in 2019, creates additional options for small employers offering nonelective and matching contributions in their 401(k) plans. The bill also makes changes to automatic-enrollment and automatic-increase rules.
The Commission on Retirement Security Act of 2021 would establish an executive branch commission to conduct a comprehensive study of the state of retirement security in the United States and, within two years, submit a report to Congress with recommendations on how to improve or replace existing private retirement programs.
The Retirement Security Flexibility Act of 2021 has been referred to the Senate Committee on Finance, while the other bills have been referred to the Senate Health, Education, Labor, and Pensions Committee.