Merkley Introduces Major New Retirement Security Legislation to Give Every Worker Access to a Retirement Savings Plan

Statement

Today, Oregon's Senator Jeff Merkley unveiled the American Savings Act, major new national retirement security legislation. The American Savings Act would give every worker without access to a retirement savings plan through their employer the ability to save for retirement through their own, personal retirement savings account modeled on the same high-quality retirement savings plan already used by federal workers and members of Congress.

As our economy has changed and workers switch jobs more frequently over the course of their careers, fewer and fewer workers now have access to a traditional company-sponsored pension. Retirement savings must make up the difference, but 68 million Americans currently do not have access to a retirement savings plan through their employer, and these trends will only intensify with the rise of the sharing economy.
The American Savings Act would give any worker not currently covered by an employer-sponsored retirement savings plan access to a new type of retirement savings account that would be universal, portable, simple and personal: the American Savings Account.

"It shouldn't matter whether you work part-time or full-time, as an employee or as a contractor, or for a huge corporation or a tiny business: every American worker deserves access to a financially secure retirement," said Merkley. "With private-sector pensions becoming rarer and rarer, Social Security and retirement savings are more important to retirement security than ever, which is exactly why we must strengthen Social Security and expand high-quality retirement savings options to all workers. This plan helps millions of American workers to save easily and automatically for retirement with tax benefits, rock-bottom fees and the same types of high-quality investment options already enjoyed by federal workers and members of Congress."
Today, the Center for American Progress Action Fund also released a report detailing the tremendous impact that a retirement savings system similar to the one proposed in the American Savings Act could have on Americans' financial security. A full copy of that report can be found here.

"The Thrift Savings Plan is used by millions of federal employees, including members of Congress, to help ensure a secure retirement--and with good reason. The TSP offers simple, easy-to-understand, and sensible investment options, and low fees," said David Madland, senior fellow at CAP Action and senior advisor to CAP Action's American Worker Project. "When workers do not have access to a retirement plan at their workplace, either because their employer does not offer one or because of the nature of their work, they are unlikely to save for retirement. Expanding access to a TSP-style plan could help shore up our private retirement system--which is currently failing to meet the needs of a significant part of our workforce--and offer a more secure retirement to millions of Americans."

Because employers using ASAs would simply need to send employees' ASA savings to the federal government alongside the employee tax withholdings that they already process, the American Savings Act offers a high-quality option for small businesses without added paperwork or hassle. "The Main Street Alliance member businesses applaud Senator Merkley's leadership on this important issue," said Amanda Ballantyne, National Director, The Main Street Alliance. "We look forward to working together to ensure that the American Dream of retiring comfortably after a lifetime of work is within reach for small business owners and their employees."

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