The Portable Retirement Act would allow Americans to contribute to a retirement savings account concurrently with the receipt of their social security number, with or without a plan sponsor.The act is aimed at people who don’t already have a way to save for retirement.
How it Will Work
- PRIA Fund- It’ll be managed similarly to a federal thrift savings plan, which is like a 401(k) specifically for federal and uniformed employees. A PRIA fund or Portable Retirement Investment Account fund will be set up and a board appointed to oversee regulation of the fund, according to the legislators responsible.
- $500 Deposit- Potential PRIA account holders need to deposit a minimum of $500 to get set up. However the government will also deposit $50 to anyone who completes a financial literacy course.
- The PRIA Basic Account- According to when an account holder turns 65, the director of the fund is authorised to invest accounts into a Target Date Fund. Then a third party trustee is appointed to manage investments.
- Alternatively account holders can opt for a PRIA Choice Account to manage their own investments.
How can Employers get Involved?
Employers can only get involved if they don’t already offer a retirement plan or have employees who’re not eligible for the sponsored plan where they work. With that in mind here are some of the ways Bosses can participate:
- Automatic Contributions and automatic contribution increases
- Using payroll direct deposit to pay into PRIA accounts
- Contribute in place of their employee
The Reason and Timing Behind the Move
One of the senators behind the legislation, Mark Warner, D-Virginia, has expressed concern that more and more Americans are becoming gig workers or doing multiple jobs, and are not afforded the same kind of retirement security as people with an employer sponsored plan.
The PRIA act is designed to help Americans living a precarious working life, a more stable source of savings and retirement.
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