Retirement Savings for Americans Act of 2025
Sponsored By: Senator John Hickenlooper
Introduced
Summary
Creates a federal automatic retirement savings system. It establishes the American Worker Retirement Fund in the Treasury, an Investment Board and Executive Director, auto‑enrolls qualifying workers at a 3% default contribution, and provides a government matching tax credit deposited directly into participant accounts.
Show full summary
- Workers and participants: Qualifying workers are auto‑enrolled at a 3% default and can opt out; contributions are treated as Roth for tax purposes and participants may select investments at least twice a year.
- Employers: Businesses without an existing retirement plan must enroll qualifying workers within one year and may face penalties for missed deposits that scale up to 10%.
- Tax credit and accounts: The Government Match Tax Credit under new IRC Sec. 25F is paid into accounts and fully matches contributions up to 3% of gross income and partially matches the next 2% with income‑based phaseouts.
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Bill Overview
Analyzed Economic Effects
4 provisions identified: 2 benefits, 1 costs, 1 mixed.
Refundable government retirement match credit
If enacted, eligible people would get a refundable match credit for the Fund equal to 1% of gross income plus a match on contributions. If enacted, contributions up to 3% of income would get a 100% match, and contributions from 3% to 5% would get a 50% match. If enacted, the credit would be capped at 5% of a phaseout amount tied to median personal income and reduced by $75 for each $1,000 (or part) above that amount. If enacted, Treasury would deposit the credit directly into participants' Fund accounts for tax years after Dec. 31, 2024.
Automatic enrollment and employer rules
If enacted, employers would have to auto-enroll workers who lack automatic-enrollment plans unless workers opt out. If enacted, the default contribution would be 3% of pay. If enacted, sole proprietors and independent contractors would also have to enroll or opt out. If enacted, employers who fail to enroll or to deposit contributions could face penalties of 2%, 5%, or 10% of missed contributions, depending on how late deposits are.
Treasury retirement fund and protections
If enacted, the bill would create an American Worker Retirement Fund at Treasury to hold contributions, matches, and earnings. If enacted, a five-member Board, an Executive Director, and an Advisory Council would run and set investment rules. If enacted, the Fund would offer target-date default funds and government, fixed-income, and stock index options and would limit manager concentration and contract length. If enacted, the bill would set fiduciary duties, bonding, insurance, and civil penalties to protect participant accounts. If enacted, participants would get individual accounts, Roth treatment for contributions, loans limited to contribution amounts, hardship rules, and spousal/survivor protections similar to the Thrift Savings Plan.
Required payouts for very high earners
If enacted, participants whose gross income exceeds an IRS threshold would be required to receive that year's contributions as a distribution. If enacted, the Executive Director would notify the participant within 7 days and give 30 days to roll the money into another eligible plan. If enacted, amounts paid directly to a participant could be treated as early distributions under tax rules.
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Sponsors & CoSponsors
Sponsor
John Hickenlooper
CO • D
Cosponsors
Sen. Tillis, Thomas [R-NC]
NC • R
Sponsored 4/30/2025
Roll Call Votes
No roll call votes available for this bill.
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