S2335119th CongressWALLET

Pensions for All Act

Sponsored By: Senator Bernie Sanders

Introduced

Summary

Expands FERS-style federal retirement benefits to private-sector workers and the self-employed while creating a tax credit for some pension contributions and a penalty for noncompliance. The bill would let private employers, employees, and self-employed people choose between a covered retirement program or participation in the Federal Employees Retirement System and would extend Thrift Savings Plan rules beyond federal workers.

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Bill Overview

Analyzed Economic Effects

5 provisions identified: 3 benefits, 1 costs, 1 mixed.

FERS access for private workers

If enacted, some non‑Federal employees and some self‑employed people would be able to join the Federal Employees Retirement System. The bill defines who is a "covered" non‑Federal employer, covered employee, and covered self‑employed person. Employers and self‑employed people already in one option could switch to the other at least once a year, if they choose.

Lower employer and self-employed contributions

If enacted, covered employers and covered self‑employed people would generally pay less into the retirement fund. Employers with $25 million or less in revenue would pay 50% of the usual contribution. Employers with $25,000,001 to $100,000,000 would pay 50% plus an extra share equal to 50% × ((revenue − $25,000,000) / $75,000,000). Self‑employed people with basic pay up to $75,000 would pay 50% of the usual amount; pay from $75,001 to $125,000 would phase up similarly. Reductions can be cut or removed if many highly paid employees work for the employer, and an employer or self‑employed person can choose not to use the reduction for a year.

Tax credit for pension contributions

If enacted, eligible employers and self‑employed people would get a new business tax credit equal to a share of qualifying pension contributions. The base share is 50%. That share is reduced as employer receipts go above $25,000,000 or as self‑employed income goes above $75,000 using the bill's formulas. The credit applies to contributions made after enactment. Employers claiming the credit could not also deduct the same contribution or claim other credits for it.

Employer and self-employed mandates and penalties

If enacted, every employer would have to offer each worker a covered retirement program or notify the Secretary that employees will join FERS. Every self‑employed person would have to enroll in a covered program or notify that they will join FERS. Failure to comply would trigger a new tax of $10 per day for each affected person, adjusted for inflation after 2026. The tax runs until the failure is fixed or, for an employer, three months after the employee leaves. There are narrow exceptions, a $500,000 cap for unintentional failures, and waiver authority. The penalty applies to plan years beginning after December 31, 2025.

Withholding rules and pay protection

If enacted, covered non‑Federal employers would have to withhold the same share of pay from covered employees as federal employees pay. Covered self‑employed people would have the same share of pay treated as withheld and would have to deposit that amount to the Treasury. The bill would also bar employers from cutting any form of compensation for employees employed on or before enactment when the cut is made because the employee must join a covered retirement program or FERS.

Sponsors & CoSponsors

Sponsor

Bernie Sanders

VT • I

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

No roll call votes available for this bill.

View on Congress.gov

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