Helping Young Americans Save for Retirement Act
- Bill Number
- H.R. 4718
- Origin Chamber
- House
- Congress
- 119th Congress, Session 1
- Policy Area
- Taxation
- Status
- Introduced
- Latest Action
- 2025-07-23: Referred to the Committee on Ways and Means, and in addition to the Committee on Education and Workforce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
- Last Updated
- 2026-07-03T08:06:36Z
AI-Generated Summary
Purpose of the Legislation
The "Helping Young Americans Save for Retirement Act" (H.R. 4718) aims to make it easier for younger workers to start saving for retirement by lowering the minimum age for participating in certain employer-sponsored pension plans and qualified retirement trusts. It seeks to promote earlier access to retirement benefits without requiring extensive work history.
Key Provisions
- Lowered Eligibility Age: Employees can become eligible for pension plans at age 18 (instead of the current age 21) after completing a 12-month period of service, or after two consecutive 12-month periods with at least 500 hours of service each, provided they meet basic employment requirements.
- Special Reporting Rule: For pension plans where at least one employee participates solely due to the new age-18 rule, those young participants are not counted toward the plan's total number of participants for certain financial reporting and auditing requirements (under ERISA) until 5 years after the first such employee joins.
- Application Date: The changes apply to plan years starting at least 1 year after the bill's enactment.
Significant Changes to Existing Law
- Amendments to ERISA (1974): Updates section 202(c) to reduce the age threshold from 21 to 18 for participation in defined benefit and defined contribution plans. It also adds conforming changes to section headings and cross-references, and modifies reporting rules in section 104(a) to exclude young participants from initial counts.
- Amendments to Internal Revenue Code (1986): Revises section 401(k)(2)(D) for qualified cash-or-deferred arrangements (like 401(k) plans) to align with the new age-18 eligibility. It includes updates to sections 401(k)(15) and 403(b)(12) for consistency, such as adjusting references to participation rules for younger workers and certain annuity plans.
- These changes expand access while maintaining service-hour requirements to ensure eligibility is tied to actual employment.
Potential Impacts
- On Citizens: Young workers aged 18-20 could begin contributing to retirement plans sooner, potentially increasing long-term savings and compound interest growth. This may encourage financial planning among entry-level employees, such as recent high school graduates or part-time workers.
- On Government Agencies: The Department of Labor (overseeing ERISA) and the Internal Revenue Service (administering tax-qualified plans) may see minor increases in plan oversight, but the 5-year reporting exemption could reduce immediate administrative burdens for smaller plans.
- On Employers and Plans: Companies offering retirement plans might need to adjust eligibility criteria and enrollment processes, possibly leading to higher participation rates and slight cost increases for plan administration. No direct impact on international relations is evident.
Main Stakeholders Affected
- Young Employees (Ages 18-20): Primary beneficiaries, gaining earlier access to retirement savings options like 401(k) plans.
- Employers and Plan Sponsors: Must update plan documents and potentially include more participants, affecting human resources and benefits teams.
- Pension Plan Administrators and Financial Institutions: Responsible for implementing changes, including eligibility tracking and delayed reporting for young participants.
- Government Regulators: The Department of Labor and IRS, which enforce compliance and provide guidance on the updated rules.
Notable Legal, Constitutional, or Political Implications
- Legal Implications: The bill harmonizes ERISA and tax code rules to prevent conflicts in retirement plan qualifications, ensuring tax advantages (like deferred taxation) apply consistently. The 5-year participant exclusion eases compliance for plans adopting the change, reducing potential litigation over reporting errors.
- Constitutional Implications: No apparent challenges; it aligns with Congress's authority to regulate commerce and taxation affecting employee benefits.
- Political Implications: Supports bipartisan goals of enhancing retirement security for younger generations, potentially appealing to workforce development advocates. It introduces flexibility for "certain younger employees" without broadly overhauling existing frameworks, minimizing disruption to established plans.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Rep. Pettersen, Brittany [D-CO-7]
Cosponsors (8)
Rep. Rulli, Michael A. [R-OH-6], Rep. Bergman, Jack [R-MI-1], Rep. Donalds, Byron [R-FL-19], Rep. Begich, Nicholas J. [R-AK-At Large], Rep. Budzinski, Nikki [D-IL-13], Rep. McBride, Sarah [D-DE-At Large], Rep. Moore, Blake D. [R-UT-1], Rep. Moore, Tim [R-NC-14]
Recent Actions
- 2025-07-23: Referred to the Committee on Ways and Means, and in addition to the Committee on Education and Workforce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
- 2025-07-23: Referred to the Committee on Ways and Means, and in addition to the Committee on Education and Workforce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
- 2025-07-23: Introduced in House
- 2025-07-23: Introduced in House
Bill Versions
- Helping Young Americans Save for Retirement Act — issued 2025-07-23 — PDF (6 pages)