Senate Bill Would Expand Retirement Plan Access to Younger Americans

Two senators reintroduced a bill on Monday that would expand access to employer-sponsored retirement plans for Americans aged 18 through 20 years old.

The Helping Young Americans Save for Retirement Act, introduced by Senator Bill Cassidy, R-Louisiana, chair of the Senate Health, Education, Labor, and Pensions Committee; and Senator Tim Kaine, D-Virginia, a member of the Senate HELP Committee, would lower to 18 the age at which plan participants must be permitted to participate in defined contribution plans governed by the Employee Retirement Income Security Act.

The original bill, introduced in November 2023 by Cassidy, Kaine and several other senators, was referred to the Committee on Health, Education, Labor, and Pensions, but did not advance.

The legislation also includes provisions that would make it less costly for employers to extend benefits to younger employees.

The bill would delay ERISA provisions that require companies to undergo mandatory audits if they allow employees younger than 21 to contribute to a pension and would exempt 18-through-20-year-old employees from testing of their funds, which would further reduce the administrative costs for employers.

“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 offered support for the legislation, including the Teachers Insurance and Annuity Association of America and College Retirement Equities Fund 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 Ac helps workers start saving earlier,” Kourtney Gibson, TIAA’s CEO of retirement solutions, wrote in a letter to the senators. “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.”

“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 a statement from 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.”