Eugene, OR. — Today, Oregon’s Senator Jeff Merkley was in Eugene to visit Falling Sky Pour House Delicatessen to discuss his major new national retirement security legislation, the American Savings Act. 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.
Senator Merkley’s new legislation builds off of successful efforts in Oregon to create an Oregon retirement savings plan for workers who not have access to a retirement savings plan through their employer. 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. “And small businesses like Eugene’s Falling Sky Brewing understand the importance that retirement savings have on the lives of their employees and the health of their businesses. Because happy and secure employees, mean a stronger business.”
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.”
The legislation is also supported by AARP and UNITE HERE.
AARP Oregon State Director Jerry Cohen said, “AARP applauds Senator Merkley’s introduction of the American Savings Act, because this legislation recognizes the serious gap in retirement readiness facing this nation, as well as the many important efforts underway in many states, including Oregon, to ensure tens of millions of workers who have no access to a workplace retirement savings plan can begin to save for their retirement.”
Details of the American Savings Act
The American Savings Act would establish a new universal savings account plan?—?the American Savings Account?—?giving all working Americans who don’t have an employer-sponsored plan access to the same types of retirement savings investments that are already available to federal employees.
How Would It Work?
If your employer doesn’t already offer a retirement plan, you’ll automatically be given your own American Savings Account (ASA). Initially, your employer will put 3% of your earnings into your account with each paycheck, but you can choose to adjust your contribution to as low as 2% of your income, or as high as $18,000 per year, or to opt out entirely.
ASAs will have the same investment options as federal employees get through the TSP plan, with similar rock-bottom costs. ASAs are simple for employers, who simply need to send employees’ ASA savings to the federal government alongside employee tax withholdings. Workers will control their own accounts directly through a website.
Contributions to an ASA would be tax-deductible, and participants would be able to rollover any previous IRAs into their ASA or roll their ASA funds into an employer-sponsored 401(k) or 403(b) plan. An independent board of directors will manage the investment of the funds.
What Are the Benefits of an American Savings Account?
- Universal: It doesn’t matter whether you work part-time or full-time, how many employers you have, whether you work as a contractor, whether you work for a tiny company or a huge corporation: everyone can get a retirement account.
- Portable: You have one ASA for life. It will follow you when you change jobs or move with no extra steps or paperwork.
- Simple: Small businesses can offer retirement accounts without hassle or added cost.
- Personal: You get to decide how much to put in the accounts and choose among a number of straightforward investment options, to make sure your ASA is right for you.
For more information on the American Savings Act, visit merkley.senate.gov/retirement.