SAVE Act Seeks to Expand Access to Retirement Plans
A new bipartisan bill was introduced by Rep. Ron Kind (D-WI) in the House Oct. 16 that would expand access to retirement savings plans.
The Savings for All Vocations Enhancement (SAVE) Act seeks to increase access to retirement savings for employees of nonprofit organizations that utilize 403b employer-provided retirement plans, incentivize S-Corporation businesses to convert to an Employee Stock Ownership Plan (ESOP) structure, and correct overly harsh individual retirement account (IRA) penalties bringing them in line with those of 401ks.
The SAVE Act was introduced by Kind along with Reps. Mike Kelly (R-PA) and Jason Smith (R-MO).
In a statement, Kind said the SAVE Act would expand access to savings by including provisions to:
Incentivize owners of S-Corporations to convert to ESOPs [by allowing the election of IRS Code Section 1042]
Make sure that an inadvertent mistake on an IRA does not ruin a person’s retirement by rectifying penalties that IRA holders can face by bringing them in line with 401k penalties
Allow for 403b plans to utilize Open Multiple Employer Plans, which would allow 403b plans for workers from non-profits such as hospitals, school districts, and churches to pool their retirement investments together, creating better opportunities and security for their retirements
Rep. Ron Kind (D-WI)
“I am proud to introduce the bipartisan SAVE Act today to help more Americans better plan for retirement,” said House Ways and Means Committee member Kind, adding that too many people find saving for retirement to be out of reach and confusing. “These are commonsense steps to make retirement savings as easy and understandable as possible for everyone, no matter what they do.”
“As the nation continues to grapple with staggering job losses and massive uncertainty facing our workers, it is urgent that policymakers in Washington create more economic stability and opportunity for everyday workers,” said Employee-owned S Corporations of America (ESCA) President and CEO Stephanie Silverman.
Even before the current crisis, almost half of working Americans had no employer-provided retirement savings plan, Silverman said, whereas every employee-owner who is part of an ESOP-owned company has at least one company retirement plan. “By facilitating more ESOPs in private industry, Congressman Kind’s legislation will allow even more Americans to build meaningful retirement savings and reap the benefits of employee-ownership,” she added.