New push from Kaine aims to close retirement gap for Virginia’s youngest workers

This article was reprinted with permission from Virginia Mercury. 

U.S. Sen. Tim Kaine, D-Va., is backing bipartisan legislation aimed at helping workers as young as 18 — particularly those who enter the workforce straight out of high school — gain access to employer-sponsored retirement plans, a benefit many currently don’t receive until age 21.

On Monday, Kaine, a member of the Senate Health, Education, Labor, and Pensions (HELP) Committee, teamed up with HELP Committee Chair Bill Cassidy, R-La., to reintroduce the Helping Young Americans Save for Retirement Act. The bill seeks to eliminate regulatory and financial barriers that discourage employers from offering retirement benefits to younger employees, a gap that disproportionately affects low-income and non-college-bound workers.

“Contributing to a retirement plan early on sets people up for financial security in the future,” Kaine said. “I’m proud to introduce this bipartisan bill that would ensure younger workers have access to their employer-sponsored retirement benefits when they are starting out in their careers.”

Under existing federal law, employers who offer 401(k) or other defined contribution plans are only required to make them available to workers 21 and older. While companies can voluntarily lower the participation age, many don’t, citing the cost and complexity of compliance under the Employee Retirement Income Security Act of 1974 (ERISA).

A 2021 report by the Plan Sponsor Council of America found that 40% of employers restrict retirement access to workers under 21, leaving many younger employees without the chance to begin building savings during their first years in the workforce.

“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.”

The proposed legislation would require employers to open their retirement plans to eligible employees beginning at age 18. It would also delay ERISA audit requirements that are triggered when younger workers are added and exempt those employees from certain retirement fund testing mandates that increase administrative costs for employers.

Advocates for the legislation argue that starting retirement contributions even a few years earlier can significantly improve long-term outcomes, thanks to the power of compound interest. The proposal has drawn endorsements from a wide range of organizations, including the Insured Retirement Institute, Edward Jones, TIAA, LPL, the American Benefits Council and the National Rural Electric Cooperative Association.

“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,” said Paul Richman, chief government and political affairs officer at the Insured Retirement Institute.

“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.”

The bill builds on a similar measure introduced in 2023 and reflects broader Democratic efforts to expand access to financial tools for working-class Americans. It also aligns with Kaine’s long-standing emphasis on workforce development and economic opportunity — particularly for those who do not follow a traditional college path.

The proposal now awaits consideration by the full Senate.