What does Preamble of Retirement Savings for Americans Act of 2025 do?

This bill is formally titled 'To establish the American Worker Retirement Plan, improve the financial security of working Americans by facilitating the accumulation of wealth, and for other purposes.'

What does DEFINITIONS. of Retirement Savings for Americans Act of 2025 do?

This section defines terms used throughout the Act. The term 'Account' refers to an account established and maintained under section 107. The 'Board' is the American Worker Retirement Investment Board established under section 201. A 'Business' is any entity engaging in interstate commerce. The 'Fund' is the American Worker Retirement Fund established under section 101(a). A 'Qualifying worker' is an employee or independent contractor meeting specific criteria related to retirement plan availability. A 'Former participant' is a participant who is no longer a qualifying worker, unless they re-enroll. The term 'Existing retirement plan' includes eligible retirement plans, the Thrift Savings Plan, and other tax-deferred plans deemed consistent with the Act's purposes.

What does RELATIONSHIP TO SOCIAL SECURITY. of Retirement Savings for Americans Act of 2025 do?

This section clarifies the relationship between the Fund and Social Security benefits. Funds payable under the Fund are considered in addition to benefits payable under the Social Security Act.

What does GOVERNMENT BENEFITS. of Retirement Savings for Americans Act of 2025 do?

This section concerns government benefits for individuals under age 65. Funds in an account and contributions to those funds are not considered when determining eligibility for Federal public assistance benefits for individuals who have not attained age 65. The Secretary of the Treasury can contribute to these funds.

What does THE AMERICAN WORKER RETIREMENT FUND. of Retirement Savings for Americans Act of 2025 do?

This section establishes the American Worker Retirement Fund in the Treasury of the United States. The Fund's composition includes contributions under sections 105 of this Act and 25F of the Internal Revenue Code, investment earnings, and is reduced by payments, including administrative expenses. Funds within the account can be used for investments, administrative expenses, distributions, loans, and insurance purchases. Each participant has an individual account within the Fund, with contributions deposited and credited according to Treasury regulations. Administrative expenses, including financial literacy requirements, are paid from the Fund's net earnings. Sums in the Fund are intended for the exclusive benefit of participants or former participants and their beneficiaries. Generally, funds in the Fund cannot be assigned or alienated, but loans to participants are exempt from this restriction. Certain legal obligations, such as child support or alimony payments, Federal tax levies, and payments under section 109, can supersede the restriction on alienation. The Fund's sums are non-appropriated and can only be used for the purposes specified in this section. All contributions and net earnings are considered the exclusive property of the participant. Contributions are fully nonforfeitable, except as provided in section 25F(h) of the Internal Revenue Code.

What does INVESTMENT OF AMERICAN WORKER RETIREMENT FUND. of Retirement Savings for Americans Act of 2025 do?

This section establishes investment policies for the American Worker Retirement Fund. The Board is responsible for selecting investment funds, indexes, and other investment products for the Fund. Participants are provided with several investment options, including Government Securities, Fixed-Income, Common Stock Index, Small Capitalization Stock Index, International Stock Index, and Life-Cycle Investment Funds. The Board may add other investment options consistent with its fiduciary duty. The Executive Director invests the Fund's sums and defaults to an age-appropriate Life-Cycle Investment Fund if no selection is made. Participants can select their investment funds at least twice per year. Voting rights associated with the Fund's securities cannot be exercised. The Board must provide regular reports to participants on investment performance, including personalized retirement estimates.

What does ELIGIBILITY. of Retirement Savings for Americans Act of 2025 do?

A qualifying worker becomes eligible to participate in the Fund after completing the enrollment process outlined in section 104. Former participants are not eligible to contribute to the Fund under section 105(a). Former participants retain ownership of the funds in their account and any associated earnings. Former participants are subject to withdrawal conditions established in section 106. Former participants can make investment decisions regarding their account similarly to current participants.

What does ENROLLMENT. of Retirement Savings for Americans Act of 2025 do?

This section establishes an enrollment process for participating employers to enroll qualifying workers in the Fund. Businesses operating when the Fund is established must complete the enrollment process for qualifying workers within one year. Businesses can elect to enroll independent contractors as qualifying workers, but this election does not affect the worker's classification as an independent contractor. Employers must automatically enroll qualifying workers in the Fund unless the worker opts out. Enrolled workers are automatically enrolled to make contributions at a default rate of 3% of their compensation. Qualifying workers can opt-out of participating through procedures established by the Secretary of the Treasury and the Executive Director. Employers failing to enroll qualifying workers or deposit contributions are subject to penalties ranging from 2% to 10% of the unpaid amount, based on the duration of the failure. The Secretary of the Treasury shall credit the Fund with sums necessary to carry out this section and section 105(d).

What does CONTRIBUTIONS. of Retirement Savings for Americans Act of 2025 do?

This section outlines the rules for participant contributions to a Fund. Participants can contribute up to their compensation in each pay period, subject to regulations. Additional contributions are permitted under section 414(v) of the Internal Revenue Code of 1986. Participants may contribute tax refunds, subject to limitations in subsection (c). The Secretary of the Treasury and the Executive Director are responsible for establishing regulations for regular contributions, including modification and termination. Contributions are subject to limits under section 219(b)(5) of the Internal Revenue Code of 1986, excluding contributions made under section 25F. Contributions under subsection (a) are not excludable from gross income and no deduction is allowed. The Secretary of the Treasury contributes the Government Match Tax Credit under section 25F, which is credited to the participant's account.

What does DISTRIBUTIONS. of Retirement Savings for Americans Act of 2025 do?

This section outlines distribution options for former participants, including annuities, single payments, or multiple payments. Former participants can request transfers of withdrawn amounts to existing retirement plans, subject to Executive Director requirements. The Executive Director can prescribe regulations regarding withdrawal limitations and conditions. Methods of payment for annuities will be substantially similar to those under section 8434 of title 5, United States Code. Former participants can generally change their election regarding withdrawals, except for annuity elections after a contract is purchased. If a participant or former participant dies, the account value may be paid in a manner consistent with section 109, and a surviving spouse may maintain the account with certain restrictions. If a former participant's account balance is below a prescribed amount, the Executive Director must pay the balance in a single payment. Participants or former participants may borrow from their accounts, subject to limitations and conditions, including providing information on loan costs. Participants may apply for voluntary withdrawals based on age or financial hardship, subject to certain limitations. Participants may receive involuntary distributions if their gross income exceeds a specified threshold, with options for rollovers or direct payments.