WASHINGTON – Today, U.S. Senators Bill Cassidy, M.D. (R-LA), ranking member of the Senate Health, Education, Labor, and Pensions (HELP) Committee, and Tim Kaine (D-VA) introduced the Auto Reenroll Act of 2023, legislation to assist American workers in taking advantage of their available retirement plans and full employer match.
Some employees choose to not participate in their employer’s retirement plan or take advantage of the full employer match when starting out and making entry level wages. However, many forget to join or increase their contribution as they move up in income, leaving significant money on the table. Only 75 percent of private sector workers who have access to employer-sponsored retirement plans participate. And one-third of employees are not taking advantage of their full employer matching contribution.
“With over half of all Americans are not on track for retirement and other safety nets like Social Security on track to go insolvent, we are in a retirement crisis,” said Dr. Cassidy. “Auto-reenrollment puts workers in the better position to prepare for retirement while staying in control of their financial decisions.”
“Many Americans have the option to enroll in employer-sponsored retirement plans, but they do not take advantage of this benefit and miss out on critical retirement contributions from their employers,” said Senator Kaine. “I’m proud to introduce this bipartisan bill to help more Americans take advantage of the retirement benefits offered to them and be on better financial footing.”
The Auto Reenroll Act of 2023 would amend safe harbors in the Employee Retirement Income Security Act (ERISA) and Internal Revenue Code (Code) to permit plan sponsors to reenroll non-participants at least once every three years, unless the individual affirmatively opts out again. Plans would be permitted to sweep as a group everyone who meets the requirements for reenrollment, rather than on each employee’s enrollment date, and need only provide this reenrollment opportunity to those who are not participating in the plan at all.
The legislation is supported by the American Benefits Council, Nationwide Retirement Solutions, and Fidelity Investments.