Saving for the Future Act

To establish a universal personal savings program, and for other purposes. 1. Short title This Act may be cited as the Saving for the Future Act 2. Findings Congress finds as follows: (1) Three out of 10 private-sector workers lack access to any workplace retirement plan, according to a Bureau of Labor Statistics report in March 2018. (2) A retirement study conducted by the Government Accountability Office found that 52 percent of households age 55-and-older have no retirement savings in a defined contribution plan or individual retirement account, and nearly 30 percent of households age 55-and-older have no retirement savings and no defined benefit plan. (3) A 2015 report on the economic well-being of United States households conducted by the Federal Reserve found that 31 percent of non-retirees reportedly have no retirement savings or pension whatsoever not confident slightly confident 3. Universal personal savings (a) In general Subtitle B of title I of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1021 8 Universal Personal Savings 801. Definitions For purposes of this part: (1) Applicable employer The term applicable employer (A) with at least 10 full-time equivalent employees; and (B) that has employed at least 10 full-time equivalent employees for not less than 2 years. (2) Board The term Board (3) Employee The term employee (4) Executive Director The term Executive Director (5) Full time The term full time (6) Full-time equivalent employee The term full-time equivalent employee (A) the number of employees working full time; and (B) the full-time equivalent of the number of employees working part-time, as defined and calculated in the manner determined most appropriate by the Secretary. 802. Employer contribution requirements (a) Minimum employer contribution (1) In general Beginning in the first full taxable year following the date of enactment of the Saving for the Future Act (2) Minimum employer contribution (A) Initial amounts For the first year in which the requirements of paragraph (1) apply, and the 1 year immediately following such first year, the minimum amount an applicable employer is required to contribute for each full-time employee is $0.50 per hour worked by the employee. (B) Third and fourth years For the 2 years immediately following the period during which subparagraph (A) applies, the minimum amount an applicable employer is required to contribute for each full-time employee is $.60 per hour worked by the employee. (C) Subsequent years The Secretary shall increase the amounts described in subparagraph (B) for the year immediately following the period during which subparagraph (B) applies, and every 3 years thereafter, by an amount proportional to growth in average base supervisory wages. (3) Noncompliance In the case of an applicable employer that is found to be in violation of the requirement under paragraph (1), such employer shall be required to make the contributions required under paragraph (1), plus interest, at an interest rate set by the Secretary through rulemaking. (b) Qualifying plans (1) In general Each applicable employer shall provide a pension plan for all employees. (2) Types of plans The pension plan required under paragraph (1)— (A) (i) in the case of an applicable employer with 100 or more full-time equivalent employees, shall be an employer plan, which may be a plan described in section 401(k) section 219(g)(5) (ii) in the case of an applicable employer with fewer than 100 full-time equivalent employees, shall be a plan described in subparagraph (A), a simple retirement account under section 408(p) (B) in the case of an applicable employer who does not provide an employer contribution but offers a State-established or -facilitated program described in subparagraph (A)(ii), such employer shall provide an UP Retirement Account to which the employer makes contributions, and any employee contributions shall be directed to the State plan. (3) Clarification of employer obligations with respect to certain employees In the case of an applicable employer that offers an UP Retirement Account plan and any other type of plan described in subparagraph (A)(i), (A)(ii), or (B), as applicable, of paragraph (2), to employees, with respect to employees for whom the employer is not required under this Act to offer participation in such other type of plan, the requirements of this part may be met by allowing such employees to participate in such other plan. (c) Standard notice The board shall develop a standard notice that employers with fewer than 10 workers electing not to make contributions are required to provide to each employee upon hire, and annually thereafter. Such notice shall provide instructions on how to set up an account, make contributions, and claim the individual credit under section 25BB 803. UP Account Board (a) Establishment of Board There is established a Federal Universal Personal Savings Investment Board, an independent government agency for the purpose of overseeing UP Accounts. (b) Membership (1) Appointment of members The President shall appoint, by and with the consent of the Senate, 5 members to serve on the Board. Such members shall have substantial experience, training, and expertise in the management of financial investments and pension benefit plans. (2) Executive director The Board shall hire an Executive Director of the Board. (3) Terms Each member shall serve a term of 5 years, except that, of the members first appointed, 1 shall serve a term of 1 year, one shall serve a term of 2 years, one shall serve a term of 3 years, one shall serve a term of 4 years, and one shall serve a term of 5 years. Each member of the Board may serve up to 2 consecutive terms. (c) Funding Administrative expenses incurred to carry out this part shall be paid first out net earnings in the UP Account Fund. 804. UP Account Fund (a) In general There is established in the Treasury of the United States an UP Account Fund. (b) Funds The UP Account Fund shall consist of all amounts contributed by participants, and employees on behalf of participants, into UP Retirement Accounts and UP Savings Accounts, increased by the total net earnings from investments of sums in the UP Account Fund or reduced by the total net losses from investments of the UP Account Fund, and reduced by the total amount of payments made from the UP Account Fund (including payments for administrative expenses). (c) Permissible uses of funds The sums in the UP Account Fund are appropriated and shall remain available without fiscal year limitation— (1) to invest in accordance with section 805(h); (2) to pay benefits or purchase annuity contracts under this subchapter; and (3) to pay administrative expenses. 805. UP Retirement Accounts (a) In general The Board shall establish UP Retirement Accounts that are portable, defined contribution pension plans. (b) Rollovers (1) Definitions For purposes of this subsection— (A) the term eligible rollover distribution section 402(c)(4) (B) the term qualified trust section 402(c)(8) (2) Rollovers A participant may contribute to the UP Retirement Account an eligible rollover that a qualified trust could accept under the Internal Revenue Code of 1986. A contribution made under this subsection shall be made in the form described in section 401(a)(31) (3) Regulations The Executive Director shall prescribe regulations to carry out this subsection. (c) Administration The Board shall contract with one or more private investment firms to administer the UP Accounts. The Board shall contract with multiple private investment firms, as necessary to ensure that no single firm administers more than $500,000,000,000 in UP Account assets. (d) Individual eligibility (1) In general An employee is eligible to participate in an UP Retirement Account if— (A) the employee's employer establishes an UP Retirement Account on the employee's behalf; or (B) the employee demonstrates to the Board that the employee works for a employer that is not an applicable employer. (2) Maintenance of account An individual who becomes a participant in an UP Retirement Account as described in paragraph (1) may maintain such account and may continue to make individual contributions to such account, regardless of such individual's subsequent employment status, provided that the individual is not a participant in another plan described in section 802(b)(2). (e) Quarterly statements The Board shall provide participants with a quarterly statement explaining each participant's projected income in retirement under different distribution scenarios and identifying the total dollar amount paid in fees for the year. (f) Employee and employer contributions (1) Employee contributions (A) In general Applicable employers making contributions required under section 802 to an UP Retirement Account shall auto-enroll all employees in such an account with an employee contribution that is equal to 4 percent of the employee's wages, with the option for any such employee to elect a different employee contribution level or to opt out of such account at any time. (B) Auto-escalation Employees making contributions to an UP Retirement Account shall have their contributions automatically escalated by half a percentage point at the conclusion of each full year during which such employer is so enrolled, until reaching the level of a 10 percent employee contribution. Any employee may opt out of such automatic escalation. (C) Default elections in the case of changes in employment In the case of an employee who was enrolled in an UP Retirement Account through one employer and subsequently ceases to work for such employer, if the employee subsequently is employed by another applicable employer, the employee's default contribution level under this paragraph shall be the same level that it was on the last day of employment with the previous employer. (2) Employer contributions (A) In general Applicable employers may contribute more to an employee's UP Retirement Account than is required under section 802, but may not contribute more than ½ the amount in effect under section 402(g)(1)(B) (B) Default rules Any employer matching requirements under this part shall apply to any employer contributions that are in addition to the minimum employer contribution. (C) Fiduciary duties An applicable employer’s fiduciary duties with respect to an employee's UP Retirement Account extend only to the full and timely payment of contributions to their employees’ UP Retirement Accounts. For all other purposes, the members of the Board are the fiduciaries of such accounts. (g) Participant accounts (1) In general The Executive Director shall establish and maintain an account for each individual who makes contributions or for whom contributions are made under this section. (2) Balances The balance in a participant's account at any time is the excess of— (A) the sum of— (i) all contributions made to the UP Retirement Account by the participant; (ii) all contributions made to such Account for the benefit of the participant; and (iii) the total amount of the allocations made to and reductions made in the account pursuant to paragraph (3), over (B) the amounts paid out of the UP Retirement Account with respect to such participant. (3) Adjustments Pursuant to regulations prescribed by the Executive Director, the Executive Director shall allocate to each account an amount equal to a pro rata share of the net earnings and net losses from each investment of sums in the UP Account Fund attributable to sums credited to such account, reduced by an appropriate share of the administrative expenses paid out of the net earnings, as determined by the Executive Director. (h) Investments The following investment rules shall apply with respect to an UP Retirement Account: (1) The Board shall make available a reasonable menu of investment products, including low-fee index funds, sufficient to provide participants with the opportunity to diversify their UP Retirement Accounts in order to minimize the risk of large losses. (2) The default investment option for participants shall minimize fees, be diversified, and automatically reduce risk to the participant as the participant approaches retirement age. (3) UP Retirement Accounts shall allow participants to change or customize investment allocation. (4) The board shall select investments solely in the interests of participants and beneficiaries and for the exclusive purpose of providing benefits and deferring reasonable expenses with the prevailing care, skill, prudence, and diligence that a prudent individual acting in a like capacity and familiar with such matters would use. (i) Distributions (1) In general The Board shall ensure that investors are offered forms of distribution that include— (A) monthly income for life for the participant or surviving spouse, if applicable; (B) monthly income until the normal or maximum Social Security retirement age for the participant or surviving spouse, if applicable; and (C) automatic, regular withdrawals, under which a set percentage of initial capital is withdrawn each year, on a monthly basis. (2) Death of participant In case of death of a participant, a lump sum shall be paid to designated beneficiary. 806. UP Savings Accounts (a) In general In addition to a standard UP Retirement Account under section 805, a participant may maintain an UP Savings Account, established by the Board, and designed as safe, short- to medium-term savings vehicles. (b) Contributions; maximum balance (1) In general Participants may make contributions to their UP Savings Account until the account reaches the maximum balance amount described in paragraph (1). Any contributions a participant wishes to make after the participant's account reaches such maximum balance amount shall be credited to the participant's UP Retirement Account established under section 805. An UP Savings Account may grow past the maximum balance amount due to accumulation without penalty. (2) Increased amounts The Board shall establish the maximum balance amount for purposes of paragraph (1) as follows: (A) For the first fiscal year that begins after the date of enactment of the Saving for the Future Act (B) For fiscal year immediately following the fiscal year described in subparagraph (A), and each fiscal year thereafter, the Board shall increase the maximum balance amount from the previous year, in increments of $100 that most closely reflects the average wage growth during the applicable 12-month period. (3) Default rule Any contributions a participant makes pursuant to accounts established under this part shall be credited to the participant's UP Savings Account, until such has reached the maximum balance amount, unless the participant specifies otherwise. Once the maximum balance is reached, additional contributions will go to a participant's UP Retirement Account. (c) Investment The Board may invest contributions to UP Savings Account only in cash, money market funds, certificates of deposit, or government bonds. (d) Withdrawals Participants may withdraw amounts from their UP Savings Account when experiencing a specific financial situation that requires a non-routine use of money, as determined by the Board (in rules similar to the rules governing hardship distributions from a trust described in section 401(a) (e) Other pension plans Any pension plan may offer a safe, short- to medium-term savings account with terms similar to the terms that apply to UP Savings Accounts described in this section. For purposes of this Act, any such account shall be considered part of the pension plan. 807. Tax treatment of UP Accounts (a) In general For purposes of the Internal Revenue Code of 1986— (1) the UP Account Fund shall be treated as a trust described in section 401(a) of such Code which is exempt from taxation under section 501(a) of such Code; (2) any contribution to, or distribution from, the UP Account Fund shall be treated in the same manner as contributions to or distributions from such a trust; and (3) subject to section 401(k)(4)(B) of such Code and any dollar limitation on the application of section 402(a)(8) of such Code, contributions to the UP Account Fund shall not be treated as distributed or made available to an employee or Member nor as a contribution made to the Fund by an employee or Member merely because the employee or Member has, under the provisions of this part, an election whether the contribution will be made to the UP Account Fund or received by the employee or Member in cash. (b) Nondiscrimination requirements Notwithstanding any other provision of law, the UP Account Fund is not subject to the nondiscrimination requirements applicable to arrangements described in section 401(k) (c) Rule of construction Subsection (a) shall not be construed to provide that any amount of the employee's or Member's basic pay which is contributed to the UP Account Fund shall not be included in the term wages section 3121(a) 808. Qualified Roth contribution program (a) Definitions For purposes of this section— (1) the term qualified Roth contribution program section 402A(b) (2) the terms designated Roth contribution elective deferral section 402A (b) Authority To establish The Executive Director shall by regulation provide for the inclusion in the UP Accounts of a qualified Roth contribution program, under such terms and conditions as the Board may prescribe. (c) Required provisions The regulations under subsection (b) shall include— (1) provisions under which an election to make designated Roth contributions may be made by any individual who is eligible to make contributions to an UP Account under section 805(d); and (2) any other provisions which may be necessary to carry out this section. 809. Survivor annuities The rules on survivor annuities under subchapter IV of chapter 84 . (b) Clerical amendment The table of contents in section 1 of the Employee Retirement Income Security Act of 1974 is amended by inserting after the item relating to section 734 the following new items: PART 8—Universal Personal Savings Sec. 801. Definitions. Sec. 802. Employer contribution requirements. Sec. 803. UP Account Board. Sec. 804. UP Account Fund. Sec. 805. UP Retirement Accounts. Sec. 806. UP Savings Accounts. Sec. 807. Tax treatment of UP Accounts. Sec. 808. Qualified Roth contribution program. Sec. 809. Survivor annuities. . 4. Increase in credit for small employer pension plan startup costs (a) In general Paragraph (1) of section 45E(b) $500 $2,000 (b) Eligible employers Paragraph (1) of section 45E(c) , applied by substituting 250 100 408(p)(2)(C)(i) (c) Penalty for noncompliant employers Subsection (c) of section 45E (3) Employers failing to make required contributions Such term shall not include an employer subject to the requirement of section 802(a)(1) of the Employee Retirement Income Security Act of 1974 that fails, within the time prescribed by the Secretary, to make any required contribution under such section 802 for the taxable year or any of the 4 taxable years preceding such year. . (d) Effective date The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act. 5. Credit for minimum employer contributions (a) In general Subpart D of part IV of subchapter A of chapter 1 45T. Credit for minimum employer contributions (a) General rule For purposes of section 38, the minimum employer contribution credit determined under this section for any taxable year is an amount equal to the applicable percentage of the qualified retirement contributions paid or incurred by the taxpayer during the taxable year. (b) Applicable percentage For purposes of subsection (a), the applicable percentage is— (1) 50 percent, in the case of contributions made with respect to not more than 15 employees of the employer (or the number of employees of the employer which is the equivalent of 15 full-time employees), and (2) 25 percent, in the case of contributions made with respect to so many of the employees of the employer (or the equivalent of so many full-time employees) as exceeds 15 but does not exceed 30. (c) Qualified retirement contributions For purposes of this section— (1) In general The term qualified retirement contributions (A) contributions made by an employer as required under section 802 of the Employee Retirement Income Security Act of 1974, and (B) contributions to a plan described in section 802(b)(2) of such Act made by an employer which is not subject to the requirement of section 802(a)(1) of such Act. (2) Only required contribution amount taken into account The term qualified retirement contributions (A) the amount determined under section 802(a)(2) of the Employee Retirement Income Security Act with respect to each employee of the employer, or (B) the amount which would be so determined if the employer were subject to the requirement of section 802(a)(1) of such Act. (d) Employers excluded for failure To make contributions Subsection (a) shall not apply to any employer which fails, within the time prescribed by the Secretary, to make any contribution required to be made by such employer under section 802 of the Employee Retirement Income Security Act of 1974 for the taxable year or any of the 4 taxable years preceding such year. (e) Special rules For purposes of this section— (1) Aggregation rules, etc Rules similar to the rules of section 45E(e) shall apply. (2) Denial of double benefit No credit shall be allowed under this section for any taxable year in which the credit under section 45E is allowed with respect to the taxpayer. (f) Credit made available to tax-Exempt eligible employers (1) In general In the case of a tax-exempt eligible employer, there shall be treated as a credit allowable under subpart C (and not allowable under this subpart) the lesser of— (A) the amount of the credit determined under this section with respect to such employer, or (B) the amount of the payroll taxes of the employer during the calendar year in which the taxable year begins. (2) Tax-exempt eligible employer For purposes of this section, the term tax-exempt eligible employer (3) Payroll taxes For purposes of this subsection— (A) In general The term payroll taxes (i) amounts required to be withheld from the employees of the tax-exempt eligible employer under section 3401(a), (ii) amounts required to be withheld from such employees under section 3101(b), and (iii) amounts of the taxes imposed on the tax-exempt eligible employer under section 3111(b). (B) Special rule A rule similar to the rule of section 24(d)(2)(C) shall apply for purposes of subparagraph (A). . (b) Credit To be made part of business credit Subsection (b) of section 38 plus , plus (33) in the case of an eligible employer, the minimum employer contribution credit determined under section 45T(a). . (c) Clerical amendment The table of sections for subpart D of part IV of subchapter A of chapter 1 Sec. 45T. Credit for minimum employer contributions. . (d) Transfers to Federal Old-Age and Survivors Insurance Trust Fund There are hereby appropriated to the Federal Old-Age and Survivors Trust Fund and the Federal Disability Insurance Trust Fund established under section 201 of the Social Security Act ( 42 U.S.C. 401 section 45T(f) (e) Effective date The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act. 6. Additional credit for individuals making retirement contributions (a) In general Subpart A of part IV of subchapter A of chapter 1 25BB. Additional credit for certain individuals making retirement contributions (a) Allowance of credit In the case of an eligible individual, there shall be allowed as a credit against the tax imposed by this subtitle for the taxable year an amount equal to 50 percent of so much of the qualified retirement contributions of the individual for the taxable year as do not exceed the base amount. (b) Eligible individual For purposes of this section, the term eligible individual (c) Qualified retirement contributions, Etc For purposes of this section— (1) In general The term qualified retirement contributions (A) an individual retirement plan, or (B) an UP Account established under section 805 of the Employee Retirement Income Security Act of 1974, for the benefit of the individual. (2) Base amount The base amount for any taxable year is an amount equal to the amount in effect under section 802(a)(3)(i) of the Employee Retirement Income Security Act of 1974 for such year. (d) Special rules (1) Investment in the contract Rules similar to the rules of section 25B(f) shall apply for purposes of this section. (2) Coordination with saver's credit The credit under this section and the credit under section 25B shall each be determined without regard to the other. . (b) Clerical amendment The table of sections for subpart A of part IV of subchapter A of chapter 1 Sec. 25BB. Additional credit for certain individuals making retirement contributions. . (c) Effective date The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act. 7. Increase in highest individual income tax rate (a) In general Each of the tables contained in subparagraphs (A), (B), (C), (D), and (E) of section 1(j)(2) 37% 39.6% (b) Conforming amendment Clause (iii) of section 1(j)(4)(B) (1) by striking 37 percent 39.6 percent (2) by striking 37-percent 39.6-percent (3) by striking 37-percent 39.6-percent (c) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2019. 8. Increase in corporate income tax rate (a) In general Subsection (b) of section 11 21 percent 23 percent (b) Effective date The amendment made by this section shall apply to taxable years beginning after December 31, 2019.

Summary: Saving for the Future Act This bill requires employers to make minimum contributions to savings plans for full-time employees and increases certain individual and corporate income tax rates. Specifically, it requires employers of 10 or more full-time employees to contribute 50 cents for each hour an employee works to a qualified pension plan. The minimum contribution increases to 60 cents per hour after two years and proportionally based on income beginning two years thereafter. The bill further establishes the Federal Universal Personal Savings Investment Board to oversee UP retirement and savings accounts. Applicable small employers may make contributions to such accounts directly as a qualified plan or through a state-run program. UP retirement accounts are portable, defined-contribution pension plans to which employees must contribute 4% of the employee's wages unless the employee opts out. Employers must make the minimum required contribution under this program as well as match employee contributions up to 10% of an employee's wages. The initial $2,500 of such employer contributions may be applied to an UP savings account and used for certain nonroutine expenses such as a large medical bill or home mortgage down payment. Employer contributions to UP accounts are generally deferred from income tax and employee contributions may be pretax or posttax. Employers also receive a tax credit for a specified proportion of the minimum contribution amount for up to the employer's first 30 employees. Additionally, the bill also increases the highest individual income tax rate from 37% to 39.6% and the highest corporate income tax rate from 21% to 23%.