Sponsors (10)
Official title: To establish the American Worker Retirement Plan, improve the financial security of working Americans by facilitating the accumulation of wealth, and for other purposes.
Introduced April 7, 2025 by Lloyd K. Smucker · Last progress April 7, 2025
The bill greatly expands retirement access and savings for gig, low‑income, and other workers through automatic accounts, federal matches, and legal protections, but it increases costs and administrative burdens for employers, taxpayers, and government agencies while leaving participants exposed to investment risk and some limits on control and remedies.
Qualifying workers without employer plans — including gig, freelance, and independent contractors — gain access to a centralized, nonforfeitable retirement account with automatic employer enrollment (3% default) and Treasury matching, increasing participation and retirement savings.
Eligible individuals receive a refundable tax credit and direct federal matching contributions (with IRS auto-deposit and possible advance payments), providing an immediate and automatic boost to retirement contributions.
Low-income people, people with disabilities, and Medicaid/means-tested benefit recipients can hold account funds without losing eligibility for federal assistance, preserving access to benefits while encouraging saving.
Small businesses and other employers face new enrollment, remittance, and reporting obligations — with penalties (2–10% of missed deposits) — increasing administrative burdens and costs.
Federal costs may rise because of refundable credits, Treasury matches, and preserved benefit eligibility (and Fund payments that may be additive to Social Security), increasing the fiscal burden on taxpayers.
Participants remain exposed to investment risk and potential fiduciary breaches, and the creation of a new federal administrative apparatus plus fiduciary/compliance costs could reduce net investment returns for savers.
Based on analysis of 12 sections of legislative text.
Creates a Treasury-held American Worker Retirement Fund, a five-member Investment Board, and a refundable Government Match Tax Credit that seeds and matches participant contributions into individual accounts.
Creates a new American Worker Retirement Fund (AWRF) and a five-member American Worker Retirement Investment Board to offer automatic-enrollment retirement accounts for workers who lack access to existing workplace retirement plans. The law sets up participant accounts in a Treasury-held fund, provides a refundable Government Match Tax Credit to seed accounts, defines investment options and fiduciary rules, and protects account balances from being counted for federal public assistance. The bill also directs the Board to set investment policy, require financial literacy before certain withdrawals or loans, allows loans and limited early withdrawals, and places tax-code changes (a refundable match credit) into the Internal Revenue Code effective for tax years after 2024.