WASHINGTON – Responding to changes in the economy and the nature of work, U.S. Sen. Mark R. Warner (D-VA) and Congressman Jim Himes (D-CT) today released a proposal for portable accounts that would make saving for retirement easier for American workers who can increasingly expect to work multiple jobs for multiple employers over the course of a career.
In a white paper, Sen. Warner and Rep. Himes put forward a proposal for a new type of retirement savings vehicle, the Portable Retirement and Investment Account (PRIA). The accounts – which would be universal for all Americans, and travel from job to job over the course of a lifetime in a workforce – would offer those workers who are not currently well-served by existing retirement programs a new avenue to save and manage their retirement assets. The accounts would not replace 401(k)s, IRAs, and other existing retirement accounts and would also make it easier for employees to consolidate their existing retirement accounts if they change jobs.
“Changes in the nature of work mean that Americans are more likely to change jobs and be engaged in non-traditional forms of work than they were a generation ago, but our policies haven’t kept up with these shifts. As more and more Americans can expect to hold multiple jobs across a career, a year, and even a day, we need to provide them with access to flexible, portable benefits such as retirement savings that will carry with them from employer to employer and gig to gig,” said Sen. Warner. “Input from stakeholders will be critical as we look towards developing functional solutions that will work for employers and employees alike.”
“Millions of Americans are not properly preparing for retirement and need a mechanism that makes it easier to save throughout their lives. To achieve this, Congress should create a portable retirement account that is personalized and independent from employment status. I’ve introduced a version in the House as a first draft and am grateful to Senator Warner in joining me to develop the idea further in a bicameral way. Today’s release of our white paper is a call to partnership for all interested parties who know our system isn’t working and are committed to fixing it,” said Rep. Himes. “With input from experts and stakeholders, we’ll be able to create a new, flexible and portable plan that will be an integral part of overcoming the challenges facing our retirement system.”
American workers are increasingly likely to hold several different jobs over the course of their careers. According to the Bureau of Labor Statistics, younger baby boomers held, on average, 12 jobs by the time they turned 50 – and current economic trends indicate that younger workers can expect to change jobs even more frequently. At the same time, fewer companies now offer traditional defined benefit pensions to their workers, and, whether by choice or necessity, a growing number of Americans are also engaged in alternative work arrangements that offer little or no access to retirement benefits. These trends all point to the need to offer workers a new option to save for their retirement in addition to or in lieu of traditional employer-based plans.
Sen. Warner and Rep. Himes are now seeking input from stakeholders regarding their proposal with an eye towards potential legislation. Submissions can be made to Sen. Warner’s office at PRIA@warner.senate.gov and to Rep. Himes’ office at Mark.Snyder@mail.house.gov by Friday, January 11.