WASHINGTON – Today, Senator Mark Warner (D-VA) and Congressman Jim Himes (CT-04) introduced the Portable Retirement and Investment Account (PRIA) Act of 2021. The PRIA Act will create universal, portable retirement and investment accounts that will be accessible to all Americans throughout their lives and move our retirement system into the 21st century.
“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,” Warner said. “As more and more Americans hold multiple jobs across a career, a year, and even a day, PRIA will provide more workers with access to flexible, portable benefits such as retirement savings that will carry with them from employer to employer and gig to gig.”
“The current retirement system isn’t working for all Americans,” said Himes. “The options to which American workers have access can differ significantly based on their area of employment and the systems can be needlessly confusing. In addition, many Americans lose access to retirement savings vehicles if they lose their jobs, and gig, contract, and part-time workers are often ineligible. PRIA changes all of this.”
Congress needs to act to bring more people into the system and make it easier for Americans to save:
- Approximately half of American households do not have access to a 401k retirement account.
- The Federal Reserve calculates that half of Americans have not saved enough to retire at their current standard of living.
- While 80% of full-time workers have access to retirement savings accounts, only 40% of part-time workers have access.
- According to the 2020 Report on the Economic Well-Being of U.S. Households by the Federal Reserve, around 35% of Americans work outside of traditional full-time jobs, in the gig economy.
Every American will receive a PRIA at the same time they receive a Social Security Number. PRIAs will be administered by an independent board and managed by selected financial institutions. After the creation of the initial account, account holders will have the option to choose investment options from a qualified financial institution. Employers can contribute to their employee’s PRIA just like legacy plans like 401ks, but employees who separate from their employer will still have the ability to contribute to the same PRIA plan as before.
Americans who want to keep their 401ks, IRAs, and other savings plans with which they are familiar will still have those options. PRIAs are designed to supplement the existing system and provide a simple, portable option for those who want it.
“PRIA is going to bring people in from the cold,” Himes continued. “Instead of seeing themselves fall further and further behind in their retirement savings, millions of Americans in non-traditional employment arrangements will have another tool in their retirement toolbox.”