Saving for the Future Act

II 116TH CONGRESS 1ST SESSION S. 1053 To establish a universal personal savings program, and for other purposes. IN THE SENATE OF THE UNITED STATES APRIL 4, 2019 Mr. COONS (for himself and Ms. KLOBUCHAR) introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To establish a universal personal savings program, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Saving for the Future 4 Act’’. 5 SEC. 2. FINDINGS. 6 Congress finds as follows: 7 (1) Three out of 10 private-sector workers lack 8 access to any workplace retirement plan, according 9 to a Bureau of Labor Statistics report in March 10 2018. 11 VerDate Sep 11 2014 04:39 Apr 11, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S1053.IS S1053 kjohnson on DSK79L0C42 with BILLS 2 •S 1053 IS (2) A retirement study conducted by the Gov- 1 ernment Accountability Office found that 52 percent 2 of households age 55-and-older have no retirement 3 savings in a defined contribution plan or individual 4 retirement account, and nearly 30 percent of house- 5 holds age 55-and-older have no retirement savings 6 and no defined benefit plan. 7 (3) A 2015 report on the economic well-being of 8 United States households conducted by the Federal 9 Reserve found that 31 percent of non-retirees re- 10 portedly ‘‘have no retirement savings or pension 11 whatsoever’’, and that nearly one-half of non-retirees 12 with self-directed retirement accounts are either 13 ‘‘not confident’’ or ‘‘slightly confident’’ in their abil- 14 ity to make the right investment decisions when in- 15 vesting in such accounts. 16 SEC. 3. UNIVERSAL PERSONAL SAVINGS. 17 (a) IN GENERAL.—Subtitle B of title I of the Em- 18 ployee Retirement Income Security Act of 1974 (29 19 U.S.C. 1021 et seq.) is amended by adding at the end 20 the following: 21 ‘‘PART 8—UNIVERSAL PERSONAL SAVINGS 22 ‘‘SEC. 801. DEFINITIONS. 23 ‘‘For purposes of this part: 24 VerDate Sep 11 2014 04:39 Apr 11, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S1053.IS S1053 kjohnson on DSK79L0C42 with BILLS 3 •S 1053 IS ‘‘(1) APPLICABLE EMPLOYER.—The term ‘ap- 1 plicable employer’ means an employer— 2 ‘‘(A) with at least 10 full-time equivalent 3 employees; and 4 ‘‘(B) that has employed at least 10 full- 5 time equivalent employees for not less than 2 6 years. 7 ‘‘(2) BOARD.—The term ‘Board’ means the 8 Federal Universal Personal Savings Investment 9 Board established under section 803. 10 ‘‘(3) EMPLOYEE.—The term ‘employee’, unless 11 specified otherwise, includes full-time and part-time 12 employees of an applicable employer. 13 ‘‘(4) EXECUTIVE DIRECTOR.—The term ‘Execu- 14 tive Director’ means the Executive Director of the 15 UP Account Board appointed under section 803. 16 ‘‘(5) FULL TIME.—The term ‘full time’, with 17 respect to employment, means 40 hours per week. 18 ‘‘(6) FULL-TIME EQUIVALENT EMPLOYEE.— 19 The term ‘full-time equivalent employee’ means the 20 sum of— 21 ‘‘(A) the number of employees working full 22 time; and 23 ‘‘(B) the full-time equivalent of the num- 24 ber of employees working part-time, as defined 25 VerDate Sep 11 2014 04:39 Apr 11, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S1053.IS S1053 kjohnson on DSK79L0C42 with BILLS 4 •S 1053 IS and calculated in the manner determined most 1 appropriate by the Secretary. 2 ‘‘SEC. 802. EMPLOYER CONTRIBUTION REQUIREMENTS. 3 ‘‘(a) MINIMUM EMPLOYER CONTRIBUTION.— 4 ‘‘(1) IN GENERAL.—Beginning in the first full 5 taxable year following the date of enactment of the 6 Saving for the Future Act, each applicable employer 7 shall contribute to a qualifying plan, on behalf of 8 each employee that is not enrolled in an active, de- 9 fined benefit pension plan sponsored by such em- 10 ployer, the applicable minimum amount described in 11 paragraph (2). 12 ‘‘(2) MINIMUM EMPLOYER CONTRIBUTION.— 13 ‘‘(A) INITIAL AMOUNTS.—For the first 14 year in which the requirements of paragraph 15 (1) apply, and the 1 year immediately following 16 such first year, the minimum amount an appli- 17 cable employer is required to contribute for 18 each full-time employee is $0.50 per hour 19 worked by the employee. 20 ‘‘(B) THIRD AND FOURTH YEARS.—For 21 the 2 years immediately following the period 22 during which subparagraph (A) applies, the 23 minimum amount an applicable employer is re- 24 VerDate Sep 11 2014 04:39 Apr 11, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S1053.IS S1053 kjohnson on DSK79L0C42 with BILLS 5 •S 1053 IS quired to contribute for each full-time employee 1 is $.60 per hour worked by the employee. 2 ‘‘(C) SUBSEQUENT YEARS.—The Secretary 3 shall increase the amounts described in sub- 4 paragraph (B) for the year immediately fol- 5 lowing the period during which subparagraph 6 (B) applies, and every 3 years thereafter, by an 7 amount proportional to growth in average base 8 supervisory wages. 9 ‘‘(3) NONCOMPLIANCE.—In the case of an ap- 10 plicable employer that is found to be in violation of 11 the requirement under paragraph (1), such employer 12 shall be required to make the contributions required 13 under paragraph (1), plus interest, at an interest 14 rate set by the Secretary through rulemaking. 15 ‘‘(b) QUALIFYING PLANS.— 16 ‘‘(1) IN GENERAL.—Each applicable employer 17 shall provide a pension plan for all employees. 18 ‘‘(2) TYPES OF PLANS.—The pension plan re- 19 quired under paragraph (1)— 20 ‘‘(A)(i) in the case of an applicable em- 21 ployer with 100 or more full-time equivalent 22 employees, shall be an employer plan, which 23 may be a plan described in section 401(k) of 24 the Internal Revenue Code of 1986, defined 25 VerDate Sep 11 2014 04:39 Apr 11, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S1053.IS S1053 kjohnson on DSK79L0C42 with BILLS 6 •S 1053 IS benefit pension plan, or any other plan de- 1 scribed in section 219(g)(5) of the Internal 2 Revenue Code of 1986; and 3 ‘‘(ii) in the case of an applicable employer 4 with fewer than 100 full-time equivalent em- 5 ployees, shall be a plan described in subpara- 6 graph (A), a simple retirement account under 7 section 408(p) of the Internal Revenue Code of 8 1986 or an automatic payroll deduction indi- 9 vidual retirement account or multiple employer 10 plan, including any current or prospective 11 State-established and -facilitated payroll deduc- 12 tion or automatic individual retirement account, 13 or an UP Account described in section 804; or 14 ‘‘(B) in the case of an applicable employer 15 who does not provide an employer contribution 16 but offers a State-established or -facilitated 17 program described in subparagraph (A)(ii), 18 such employer shall provide an UP Retirement 19 Account to which the employer makes contribu- 20 tions, and any employee contributions shall be 21 directed to the State plan. 22 ‘‘(3) CLARIFICATION OF EMPLOYER OBLIGA- 23 TIONS WITH RESPECT TO CERTAIN EMPLOYEES.—In 24 the case of an applicable employer that offers an UP 25 VerDate Sep 11 2014 04:39 Apr 11, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S1053.IS S1053 kjohnson on DSK79L0C42 with BILLS 7 •S 1053 IS Retirement Account plan and any other type of plan 1 described in subparagraph (A)(i), (A)(ii), or (B), as 2 applicable, of paragraph (2), to employees, with re- 3 spect to employees for whom the employer is not re- 4 quired under this Act to offer participation in such 5 other type of plan, the requirements of this part may 6 be met by allowing such employees to participate in 7 such other plan. 8 ‘‘(c) STANDARD NOTICE.—The board shall develop a 9 standard notice that employers with fewer than 10 work- 10 ers electing not to make contributions are required to pro- 11 vide to each employee upon hire, and annually thereafter. 12 Such notice shall provide instructions on how to set up 13 an account, make contributions, and claim the individual 14 credit under section 25BB of the Internal Revenue Code 15 of 1986. 16 ‘‘SEC. 803. UP ACCOUNT BOARD. 17 ‘‘(a) ESTABLISHMENT OF BOARD.—There is estab- 18 lished a Federal Universal Personal Savings Investment 19 Board, an independent government agency for the purpose 20 of overseeing UP Accounts. 21 ‘‘(b) MEMBERSHIP.— 22 ‘‘(1) APPOINTMENT OF MEMBERS.—The Presi- 23 dent shall appoint, by and with the consent of the 24 Senate, 5 members to serve on the Board. Such 25 VerDate Sep 11 2014 04:39 Apr 11, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S1053.IS S1053 kjohnson on DSK79L0C42 with BILLS 8 •S 1053 IS members shall have substantial experience, training, 1 and expertise in the management of financial invest- 2 ments and pension benefit plans. 3 ‘‘(2) EXECUTIVE DIRECTOR.—The Board shall 4 hire an Executive Director of the Board. 5 ‘‘(3) TERMS.—Each member shall serve a term 6 of 5 years, except that, of the members first ap- 7 pointed, 1 shall serve a term of 1 year, one shall 8 serve a term of 2 years, one shall serve a term of 9 3 years, one shall serve a term of 4 years, and one 10 shall serve a term of 5 years. Each member of the 11 Board may serve up to 2 consecutive terms. 12 ‘‘(c) FUNDING.—Administrative expenses incurred to 13 carry out this part shall be paid first out net earnings 14 in the UP Account Fund. 15 ‘‘SEC. 804. UP ACCOUNT FUND. 16 ‘‘(a) IN GENERAL.—There is established in the 17 Treasury of the United States an UP Account Fund. 18 ‘‘(b) FUNDS.—The UP Account Fund shall consist 19 of all amounts contributed by participants, and employees 20 on behalf of participants, into UP Retirement Accounts 21 and UP Savings Accounts, increased by the total net earn- 22 ings from investments of sums in the UP Account Fund 23 or reduced by the total net losses from investments of the 24 UP Account Fund, and reduced by the total amount of 25 VerDate Sep 11 2014 04:39 Apr 11, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S1053.IS S1053 kjohnson on DSK79L0C42 with BILLS 9 •S 1053 IS payments made from the UP Account Fund (including 1 payments for administrative expenses). 2 ‘‘(c) PERMISSIBLE USES OF FUNDS.—The sums in 3 the UP Account Fund are appropriated and shall remain 4 available without fiscal year limitation— 5 ‘‘(1) to invest in accordance with section 6 805(h); 7 ‘‘(2) to pay benefits or purchase annuity con- 8 tracts under this subchapter; and 9 ‘‘(3) to pay administrative expenses. 10 ‘‘SEC. 805. UP RETIREMENT ACCOUNTS. 11 ‘‘(a) IN GENERAL.—The Board shall establish UP 12 Retirement Accounts that are portable, defined contribu- 13 tion pension plans. 14 ‘‘(b) ROLLOVERS.— 15 ‘‘(1) DEFINITIONS.—For purposes of this sub- 16 section— 17 ‘‘(A) the term ‘eligible rollover distribution’ 18 has the meaning given such term by section 19 402(c)(4) of the Internal Revenue Code of 20 1986; and 21 ‘‘(B) the term ‘qualified trust’ has the 22 meaning given such term by section 402(c)(8) 23 of the Internal Revenue Code of 1986. 24 VerDate Sep 11 2014 04:39 Apr 11, 2019 Jkt 089200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S1053.IS S1053 kjohnson on DSK79L0C42 with BILLS 10 •S 1053 IS ‘‘(2) ROLLOVERS.—A participant may con- 1 tribute to the UP Retirement Account an eligible 2 rollover that a qualified trust could accept under the 3 Internal Revenue Code of 1986. A contribution 4 made under this subsection shall be made in the 5 form described in section 401(a)(31) of the Internal 6 Revenue Code of 1986. In the case of an eligible 7 rollover distribution, the maximum amount trans- 8 ferred to the Up Account Fund shall not exceed the 9 amount which would otherwise have been included in 10 the participant’s gross income for Federal income 11 tax purposes. 12 ‘‘(3) REGULATIONS.—The Executive Director 13 shall prescribe regulations to carry out this sub- 14 section. 15 ‘‘(c) ADMINISTRATION.—The Board shall contract 16 with one or more private investment firms to administer 17 the UP Accounts. The Board shall contract with multiple 18 private investment firms, as necessary to ensure that no 19 single firm administers more than $500,000,000,000 in 20 UP Account assets. 21 ‘‘(d) INDIVIDUAL ELIGIBILITY.— 22 ‘‘(1) IN GENERAL.—An employee is eligible to 23 participate in an UP Retirement Account if— 24 VerDate Sep 11 2014 04:39 Apr 11, 2019 Jkt 089200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S1053.IS S1053 kjohnson on DSK79L0C42 with BILLS 11 •S 1053 IS ‘‘(A) the employee’s employer establishes 1 an UP Retirement Account on the employee’s 2 behalf; or 3 ‘‘(B) the employee demonstrates to the 4 Board that the employee works for a employer 5 that is not an applicable employer. 6 ‘‘(2) MAINTENANCE OF ACCOUNT.—An indi- 7 vidual who becomes a participant in an UP Retire- 8 ment Account as described in paragraph (1) may 9 maintain such account and may continue to make 10 individual contributions to such account, regardless 11 of such individual’s subsequent employment status, 12 provided that the individual is not a participant in 13 another plan described in section 802(b)(2). 14 ‘‘(e) QUARTERLY STATEMENTS.—The Board shall 15 provide participants with a quarterly statement explaining 16 each participant’s projected income in retirement under 17 different distribution scenarios and identifying the total 18 dollar amount paid in fees for the year. 19 ‘‘(f) EMPLOYEE AND EMPLOYER CONTRIBUTIONS.— 20 ‘‘(1) EMPLOYEE CONTRIBUTIONS.— 21 ‘‘(A) IN GENERAL.—Applicable employers 22 making contributions required under section 23 802 to an UP Retirement Account shall auto- 24 enroll all employees in such an account with an 25 VerDate Sep 11 2014 04:39 Apr 11, 2019 Jkt 089200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S1053.IS S1053 kjohnson on DSK79L0C42 with BILLS 12 •S 1053 IS employee contribution that is equal to 4 percent 1 of the employee’s wages, with the option for any 2 such employee to elect a different employee con- 3 tribution level or to opt out of such account at 4 any time. 5 ‘‘(B) AUTO-ESCALATION.—Employees 6 making contributions to an UP Retirement Ac- 7 count shall have their contributions automati- 8 cally escalated by half a percentage point at the 9 conclusion of each full year during which such 10 employer is so enrolled, until reaching the level 11 of a 10 percent employee contribution. Any em- 12 ployee may opt out of such automatic esca- 13 lation. 14 ‘‘(C) DEFAULT ELECTIONS IN THE CASE 15 OF CHANGES IN EMPLOYMENT.—In the case of 16 an employee who was enrolled in an UP Retire- 17 ment Account through one employer and subse- 18 quently ceases to work for such employer, if the 19 employee subsequently is employ [Text truncated for display. Full text available on Congress.gov.]