Saving for the Future Act
Summary
The "Saving for the Future Act" aims to establish a universal personal savings program by amending the Employee Retirement Income Security Act of 1974. It mandates employer contributions to qualifying retirement plans for employees not enrolled in existing defined benefit plans. The bill also establishes a Federal Universal Personal Savings Investment Board to oversee UP Accounts, offering both retirement and savings options, and introduces tax credits for small employer pension plan startup costs and minimum employer contributions.
Expected Effects
This act will likely increase retirement savings for private-sector workers, especially those without current access to workplace retirement plans. It could also shift some of the retirement savings burden from individuals to employers, while also increasing the tax burden on higher income individuals and corporations.
Potential Benefits
- Increased retirement savings for workers without current access to workplace plans.
- Creation of portable retirement accounts (UP Retirement Accounts and UP Savings Accounts).
- Tax credits for small employers to encourage pension plan startups.
- Automatic enrollment and auto-escalation features to promote higher savings rates.
- Establishment of a Federal Universal Personal Savings Investment Board to oversee the program.
Potential Disadvantages
- Mandatory employer contributions may burden small businesses.
- Increased income tax rate for individuals and corporations could negatively impact investment and economic growth.
- Complexity in administering and managing the new UP Account system.
- Potential for government mismanagement or inefficient investment strategies by the UP Account Board.
- The act may disproportionately affect lower-income individuals if wage growth does not keep pace with contribution requirements.
Most Disadvantaged Areas:
Constitutional Alignment
The bill's alignment with the Constitution is primarily based on the "general Welfare" clause (Article I, Section 8), which allows Congress to enact laws that promote the overall well-being of the nation. The establishment of a retirement savings program could be argued as promoting the general welfare by ensuring citizens have a more secure financial future. However, the mandatory employer contributions and tax increases could raise concerns about potential infringements on individual economic liberty, although these are generally subject to rational basis review and are likely permissible.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).