The EARN Act is the latest addition to the lineup of proposals legislators have put forth to bolster retirement savings.
Senators Ron Wyden, a Democrat from Oregon, and Mike Crapo, a Republican from Idaho, introduced the Enhancing American Retirement Act on Thursday. The two serve as Senate Finance Committee Chair and Ranking Member, respectively.
“Americans deserve dignified retirements after decades of hard work, and our bill is an important step forward,” Wyden said in a statement. “In particular, I’m proud that we are making significant progress for millions of low- and middle-income workers, who are far less likely to have adequate retirement savings. These workers frequently have physical, demanding jobs, and often depend solely on their Social Security income.”
See: Congress has the chance to pass meaningful retirement reform
The EARN Act includes more than 70 provisions, such as allowing employers to offer financial incentives to contribute to a retirement plan and creating a lost and found database for retirement savings. Under this proposal, student loan payments would also be treated as elective deferrals for retirement accounts and IRA catch-up limits would be indexed (instead of staying put at $1,000 every year).
The proposal comes on the heels of the Senate Finance Committee’s unanimous approval of the EARN Act in a hearing earlier this year, weeks after the Senate Health, Education, Labor and Pensions Committee released a draft proposal for another retirement-focused piece of legislation, the RISE & SHINE Act. Both of these proposals align well with the House’s Secure Act 2.0 proposal, which passed in March.
Congress is expected to merge all of these ideas into what could be the next Secure Act 2.0, a follow-up to the 2019 retirement-centric law.
Learn how to shake up your financial routine at the Best New Ideas in Money Festival on Sept. 21 and Sept. 22 in New York. Join Carrie Schwab, president of the Charles Schwab Foundation.
