Himes says individuals cannot rely on employer-sponsored plans at all times, and considers this bill’s introduction as a call to partnership for all who know the existing system isn’t working and hope to fix it.
“The current retirement savings system is not working for most Americans. It is too reliant on employers and leaves too many people behind. Most accounts are employer-sponsored, but not every business offers a plan and more often than not, part-time and contract employees are not eligible for these accounts,” he says. “We need reforms to the system that offers universal and portable options to all Americans to retire with dignity and security.”
PRIA’s goal will be allowing individuals to have personalized and independent accounts, regardless of their employment situation. Hines identifies several statistics that he says indicates the need for a new retirement-savings vehicle:
- According to the Bureau of Labor Statistics (BLS), 49% of Americans have access to a retirement account and contribute to it, while 35% have no access and 17% have access but don’t contribute, meaning more than half the country is not saving any money in a retirement account.
- While 81% of full-time workers have access to retirement savings accounts, only 39% of part-time workers have access.
- According to a 2016 study by the Minneapolis Fed, nearly 40% of Americans will be working outside of traditional full-time jobs, including in the gig economy, by 2020.
“Millions of Americans are not properly prepared for retirement,” says Himes. “We need a mechanism that makes it easier to save throughout their lives regardless of employment status. PRIA is the solution. It’s an account that’s created when you’re born and stays with you from job to job and in between. Employers can contribute just like in legacy plans when you have a job, but individuals can contribute whenever they have the resources.”
Jim Himes represents Connecticut’s 4th District in the United States House of Representatives, where he is serving his fifth term.