Congress renews effort to require 401(k) contributions by employers

Core Points - The Saving for the Future Act aims to enhance retirement security for Americans and assist in building emergency funds through employer contributions to retirement accounts [1][4] - Companies with 10 or more employees would be required to contribute at least $0.50 per hour worked to each employee's retirement account, increasing to $0.60 after two years [2] - Workers at smaller companies would utilize federal universal personal (UP) accounts, which would allow for low-fee savings that are portable between jobs [2] Contribution Structure - The first $2,500 saved would be allocated to an UP-Savings account for emergencies, while additional savings would go into an UP-Retirement account [3] - Workers would automatically contribute 4% of their pay, with the option to adjust their contribution rate up to 10% [3] Financial Projections - A worker contributing the default 4% and receiving the minimum employer contribution could accumulate approximately $750,000 by retirement, assuming annual withdrawals of $800 from the UP-Savings account [4] - Without any withdrawals, the retirement balance could exceed $910,000 [4] - If a worker opts out of contributing, the employer's contribution alone is projected to grow to about $250,000 by retirement [5] Legislative Background - The Saving for the Future Act was previously introduced in the 2019-2020 session with support from various Democratic lawmakers [6]