Congressman Jim Himes (CT-04) and Senator Mark Warner (D-VA) introduced the Portable Retirement and Investment Accounts (PRIA) Act of 2021. The PRIA law will create universal, portable retirement and investment accounts that will be accessible to all Americans. throughout their lives and bring our retirement system into the 21st century.
“The current retirement system doesn’t work for all Americans,†Himes said. “The options that American workers have access to can differ dramatically depending on their field of employment, and the systems can be unnecessarily confusing. Additionally, many Americans lose access to retirement savings vehicles if they lose their jobs, and part-time, contract, and part-time workers are often ineligible. PRIA changes all that.
“Americans are more likely to change jobs and engage in non-traditional forms of work than they were a generation ago, but our policies have not kept up with these changes,†said Warner. “As more Americans take on multiple jobs over a career, year, and even day, PRIA will provide more workers with access to flexible and portable benefits such as savings. -retirement which will accompany them from employer to employer and together in concert. . “
Congress must act to get more people into the system and make it easier for Americans to save:
- About half of American households do not have access to a 401k retirement account.
- The Federal Reserve calculates that half of Americans have not saved enough to retire at their current standard of living.
- While 80% of full-time workers have access to retirement savings accounts, only 40% of part-time workers have access to them.
- According to the Federal Reserve’s 2020 US Household Economic Well-Being Report, about 35% of Americans work outside of traditional full-time jobs, in the odd-job economy.
Each American will receive a PRIA at the same time as they receive a Social Security number. The PRIA will be administered by an independent board and managed by selected financial institutions. After the creation of the initial account, account holders will be able to choose investment options with a qualified financial institution. Employers can contribute to their employees’ PRIA just like legacy plans like 401ks, but employees who separate from their employer will still be able to contribute to the same PRIA plan as before.
Americans who wish to keep their 401ks, IRAs, and other savings plans with which they are familiar will always have these options. PRIAs are designed to complement the existing system and provide a simple and portable option for those who want it.
“PRIA is going to bring people back from the cold,†Himes continued. “Instead of being caught further and further behind in their retirement savings, millions of Americans in non-traditional employment conditions will have another tool in their retirement toolbox.”
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