Congressman Jim Himes, D-Connecticut, and Senator Mark
Warner, D-Virginia, have introduced the Portable Retirement and Investment
Account (PRIA) Act of 2021, designed to provide a retirement savings vehicle to
Americans who don’t have access to one.
The legislation would establish a Portable Retirement and
Investment Account (PRIA) Fund and a board responsible for establishing
regulations for the fund. The bill says the board will manage the fund in the
same manner as the Federal Thrift Savings Plan is managed.
The PRIA Act authorizes the director to invest each account
into a target-date fund (TDF) based on when the account holder will reach age
65. This is called a PRIA Basic Account. Once assets reach a certain amount,
the director would contract with an entity to act as trustee and manage the
investments. Individuals could elect to roll over their PRIA Basic Account to a
PRIA Choice Account, which would allow them to select their own investments.
Accounts for individuals would be established soon after a
Social Security number is issued for them. Accounts would start with a $500
contribution, and the government would deposit $50 into the account of anyone
who completes financial literacy training.
Employers could allow individuals to contribute to their
PRIA accounts via payroll direct deposit, and employers could also implement
automatic contribution arrangements as well as automatic contribution
increases. Additionally, employers would be able to contribute to the accounts
on behalf of individuals. However, this would only be for individuals whose
employer does not offer a retirement plan or who are not eligible to
participate in their employer’s plan or individuals whose employment consists
of work through mobile platforms. Catch-up contributions would be allowed for
individuals age 50 and older. Individuals could also designate all or a portion
of their contributions as Roth contributions.
Account holders age 18 and older could elect to rollover
their PRIA account to an individual retirement account (IRA) once their account
balance reaches $15,000.
“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 in an announcement. “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.”
Click here for the
original article.