May 14 (UPI) -- Bipartisan lawmakers introduced a new plan Tuesday designed to help more Americans save for retirement -- offering new flexibility and help for low-income citizens who've saved nothing.
Sens. Ben Cardin of Maryland and Rob Portman of Ohio unveiled the plan, which includes reforms in four main areas -- helping workers set aside money, offering more flexibility in retirement years, aiding low-income Americans and promoting small business retirement plans.
The proposal would allow employers to make matching contributions equal to workers' student loan payments. It would also increase the age for minimum distributions from 70.5 to 72 in 2023, and 75 by 2030, to allow individuals to save more by working longer. It would also expand 401(k) eligibility to part-time employees who work between 500 and 1,000 hours for two consecutive years. For small businesses, the bill increases the tax credit for starting a new retirement plan, to as much as $5,000.
"Ensuring that families and workers can retire with dignity and stability is an ongoing, and strongly bipartisan effort," Cardin said in a statement. "There have been many recent efforts acknowledging this need, yet more work needs to be done to make sure families have the necessary tools to be successful in their retirement."
A Government Accountability Office report this year found nearly half of retirees over age 55 didn't have money saved, and only 49 percent of small businesses employees and 39 percent of part-time workers had access to an employer-sponsored retirement plan. Among lowest-paid workers, only 22 percent had participated in a retirement plan.
Cardin and Portman crafted legislation in 2001 to reform retirement law.
"Since our last comprehensive package became law in 2001, we've seen more Americans participate in 401(k)s and IRAs to save for their retirement but our savings rate still remains too low and there are far too many Americans with no retirement account at all," Portman said.