Two separate pieces of legislation have been proposed toincrease the number of people saving for retirement.

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Related: High earners won't like these retirementproposals

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In the House, a bill aims to expand the availability ofretirement plans for people who don’t have access to one, while inthe Senate, another is focused on removingthe barriers that keep graduate students from setting aside anymoney for retirement.

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Related: Bill reintroduced to push publication of pensionliabilities

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The House bill, the American Savings Account Act was introducedby Rep. Jared Huffman, D- Calif., and Rep. Suzanne Bonamici, D-Ore.The legislation would create a new American Savings Account, apersonal tax-advantaged retirement savings plan modeled after theplan offered to federal workers since 1986. It would make theAmerican Savings Account available to every private-sector Americanworker currently without access to an employer-sponsored savingsplan, such as a 401(k) or 403(b).

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While some states are already taking action to make retirementsavings accounts available to workers currently not covered by onein their places of work, the House bill would provide a means ofsaving for retirement for some 68 million people currently notcovered by a plan, and also avoid a patchwork of solutions thatcould leave some employees uncovered or unprotected by measuresthat safeguard the interests of those who are already able toparticipate in a plan.

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The details of the proposal

The legislation would automatically enroll workers whoseemployers don’t already offer them a plan. It would also ensure allprivate sector workers, including full-time, part-time andcontract, have immediate access to a retirement savings account nomatter the size of their employer.

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Workers could discontinue participation, or change theircontribution level (an auto-deduction of between 2–10 percent, tobe deposited in the American Savings Account from each paycheck).Even the self-employed and those who receive 1099s would be able toenroll. In addition, employers would be allowed to providetax-advantaged matching or nonmatching contributions.

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The Senate measure, introduced by Sens. Elizabeth Warren,D-Mass., and Mike Lee, R-Utah, political polar opposites, would“[amend] section 219(f) of the Internal Revenue Code to allow 'anyamount paid to an individual to aid the individual in the pursuitof graduate or postdoctoral study or research' to be consideredcompensation for purposes of determining qualified retirementcontributions to individual retirement plans.”

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Currently advanced degree students are legally prevented fromsaving in a tax-advantaged retirement account any stipend,fellowship or grant income — something that imposes a severehandicap, since “the median doctoral student takes about sevenyears to finish a degree.” Since approximately a million peoplereceive graduate degrees each year, and about 100,000 postdoctoralfellows—who, because they are paid by fellowships, are also arebarred from using that fellowship income to save for retirement —that’s a sizeable segment of the population shut out from savingfor retirement.

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