The Future of Retirement
By: Ryan Muller, Legislative Analyst, Williams & Jensen
As Congress continues to gather proposals, momentum will continue to grow toward a future SECURE Act 3.0.
Amid the scramble to find a solution to the looming expiration of enhanced Affordable Care Act premium tax credits at the end of the calendar year and the rush to pass full-year government funding bills by the end of January — lest the country endure another government shutdown — members of the Senate Committee on Health, Education, Labor, and Pensions were able to find common ground on several proposed changes to the American retirement system.
In 2019, Congress addressed retirement by passing the SECURE Act and, following up on their success in 2022, the SECURE Act 2.0. Through these laws, Congress expanded access to workplace retirement plans, making these plans easier to offer for employers and harder to ignore for employees. Provisions in these laws provided incentives to participate as well as other reforms, such as automatic enrollment, raising the age of required minimum distributions, and providing for additional exemptions to the 10 percent early withdrawal fee for retirement savings accounts.
Led by Chairman Bill Cassidy (R-LA), the Committee has made substantial progress on a handful of bipartisan proposals, epitomized by the Retire through Ownership Act and the Employee Ownership Representation Act of 2025, both of which passed the Senate unanimously and now await action in the House. The Retire through Ownership Act revises ERISA to provide a clear definition for adequate consideration for certain closely held stock, while the Employee Ownership Representation Act of 2025 would expand the membership of the Advisory Council on Employee Welfare and Pension Benefit Plans to include representatives of employee ownership organizations, establish within the Department of Labor the Office of Employee Ownership, and create an Advisory Council on Employee Ownership. Together, these bills strengthen employee ownership as a retirement strategy by reducing barriers for Employee Stock Ownership Plans (ESOPs) and institutionalizing federal support for this approach.
Chairman Cassidy and Senator Tim Kaine (D-VA) highlighted their bipartisan proposals: the Auto Reenroll Act and the Helping Young Americans Save for Retirement Act. Whereas the SECURE Act 2.0 requires that all new employer-sponsored plans automatically enroll employees, while still allowing opportunities for workers to opt out, the Auto Reenroll Act—as the name suggests—requires businesses to re-enroll employees in retirement plans every few years, providing an easy on-ramp for employees to contribute to their retirement and periodically reminding them of the opportunity to do so. The Helping Young Americans Save for Retirement Act would also reduce barriers to participation, lowering the age of plan participation eligibility from 21 to 18, helping young workers take full advantage of the effects of compounding interest. Chairman Cassiday and Senator Kaine were met with applause from the hearing's witnesses, all of whom stressed the importance of starting to save early in one's career and emphasized the benefits of periodic reenrollment.
Senator Susan Collins (R-ME) spoke about the hardships faced by individuals who take time away from work to care for sick family members, lamenting that their ability to retire comfortably should not be endangered by their decision to care for their loved ones. She presented witnesses with two bills she has offered in the past—the Catching up Family Care Givers Act, which would allow caregivers to contribute to a Roth IRA even if they are not working for pay, and the Improving Retirement Security for Family Caregivers Act, which would allow qualified caregivers to make catch-up contributions to a Roth IRA. While both bills earned support among some Democrats in 2024, neither bill has been reintroduced in the 119th Congress. While Senator Jon Husted (R-OH) was the loudest in his support for these bills, the witnesses present at the hearing lauded Senator Collins's efforts to enact these reforms, too.
Despite broad agreement on many issues, bipartisanship found its limits in this meeting. Republicans and Democrats diverged on their willingness to adopt the President's call for increased access to alternative assets—including private equity funds—though employer-sponsored defined-contribution plans, with Senators Ed Markey (D-MA) and Angela Alsobrooks (D-MD) raising the alarm as to the dangers of this policy. Senator Markey further pushed back, challenging the notion that plan participants are leaving money on the table by not investing in these assets, pointing to an Oxford University study which showed that public equity indices do as well as private equity funds over the last two decades.
While Republicans did fight back against these assertions, they took the opportunity to criticize plan providers who pursued environmental, social, and governance (ESG) initiatives at the expense of their fiduciary duties, reducing returns for plan participants.
Despite these disagreements, the overall message at the hearing was one that is often lost on the American public—there is more that the parties can agree on than that which they do not. Members on both sides of the dais supported making the freedom to retire a part of the American dream, and, as Congress continues to gather proposals, momentum will continue to grow toward a future SECURE Act 3.0.