Senator Tim Kaine, a Democrat from Virginia, and Senator Bill Cassidy, a Republican from Louisiana, reintroduced a bill on Monday that would expand access to employer-sponsored retirement plans for Americans aged 18 to 20 years old. The legislation aims to lower the age at which individuals can participate in defined contribution plans governed by the Employee Retirement Income Security Act (ERISA) to 18. The bill, originally introduced in November 2023, was referred to the Committee on Health, Education, Labor, and Pensions but did not advance at that time.
In addition to lowering the participation age, the legislation includes provisions to reduce costs for employers who extend benefits to younger employees. The bill would delay ERISA provisions that mandate companies to undergo mandatory audits if they allow employees younger than 21 to contribute to a pension. It would also exempt 18-through-20-year-old employees from certain fund testing requirements, reducing administrative costs for employers.
Bipartisan effort for early retirement access
“Americans who don’t attend college and immediately enter the workforce should be given every chance to save for retirement,” Cassidy said in a statement. “This legislation empowers American workers, giving them more opportunities to plan for a secure retirement.”
Several organizations have voiced their support for the legislation, including the Teachers Insurance and Annuity Association of America (TIAA) and the Insured Retirement Institute.
“By lowering the age at which an individual can access their workplace retirement plan from 21 to 18, the Helping Young Americans Save for Retirement Act helps workers start saving earlier,” said Kourtney Gibson, TIAA’s CEO of retirement solutions. “We know from experience that the sooner one starts saving, the better off they will be in the future and the more likely they will be to have adequate income in retirement.”
Paul Richman, Chief Government and Political Affairs Officer at the Insured Retirement Institute, also praised the measure. “The Helping Young Americans Save for Retirement Act will expand the opportunity for more younger workers to start saving earlier for retirement by allowing them to participate in their employer-sponsored workplace plans,” he said.
“This measure will not only help younger workers get into the habit of contributing to their retirement savings, but it will also provide additional years for their savings to grow to ensure a more secure financial future.”