Committee works to promote more retirement saving

Senate Special Committee on Aging Ranking Member Sen. Susan Collins (R-Maine) recently introduced bipartisan legislation that would encourage small employers to offer retirement plans and employees to save more for retirement.

Collins partnered with Sen. Bill Nelson (D-Fla.), the chairman of the Senate Special Committee on Aging, to introduce the Retirement Security Act of 2014.

“Nationally, one in four retired Americans has no source of income beyond Social Security,” Collins said. “In Maine, the number is one in three. Four in 10 rely on that vital program for 90 percent of their retirement income. Yet, Social Security provides an average benefit of just $1,294 per month -less than $16,000 per year. It’s hard to imagine stretching those dollars far enough to pay the bills and, certainly, a ‘comfortable retirement’ is out of the question.”

The bill would allow small businesses to join multiple employer plans to share the administrative burden of offering retirement plans. It would also direct the Treasury Department to simplify, clarify and consolidate notice requirements for retirement plans.

The measure would also allow employees to contribute more than 10 percent of their annual pay to automatic enrollment plans, and employers would be allowed to match contributions that comprise up to 10 percent of an employee’s total pay.

“Too many people are retiring with too little,” Nelson said. “This commonsense and bipartisan legislation will increase access to retirement plans and make it easier for folks to put more money aside.”

The Retirement Security Act would also provide a tax credit of up to $1,000 for eligible low- and middle-income individuals who contribute to IRAs or employer-sponsored retirement plans.