Pensions for All Act
- Bill Number
- H.R. 7556
- Origin Chamber
- House
- Congress
- 119th Congress, Session 2
- Policy Area
- Labor and Employment
- Status
- Introduced
- Latest Action
- 2026-02-12: Referred to the Committee on Ways and Means, and in addition to the Committees on Oversight and Government Reform, and 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
- 2026-06-03T08:08:27Z
AI-Generated Summary
Purpose of the Legislation
The "Pensions for All Act" (H.R. 7556) seeks to guarantee retirement benefits for all U.S. workers by requiring employers to offer a retirement plan comparable to the Federal Employees Retirement System (FERS)—a federal pension program for government workers—or to enroll employees in FERS itself. It extends similar retirement security to private-sector employees and self-employed individuals who currently lack adequate options, aiming to reduce retirement inequality.
Key Provisions
- Definitions:
- "Covered retirement program" refers to any non-FERS plan deemed by the Secretary of Labor to offer benefits similar to FERS (e.g., annuity, contributions, and investment options).
- Uses standard definitions of "employee" and "employer" from the Employee Retirement Income Security Act (ERISA, a law regulating private pensions).
- Applies to all employers and self-employed individuals.
- Mandatory Coverage:
- Employers must provide a covered retirement program to all employees or notify the Secretary of Labor to enroll them in FERS.
- Self-employed individuals must join a covered program or opt into FERS.
- Annual elections allow employers or self-employed individuals to switch between a covered program and FERS, coordinated by the Secretary of Labor and the Office of Personnel Management (OPM).
- Expansion of FERS:
- Amends federal law (Title 5, U.S. Code) to include "covered non-Federal employees" (those at employers without equivalent plans) and "covered self-employed individuals" in FERS eligibility, creditable service, annuities, disability benefits, and survivor rights.
- Employee contributions: Deducted from pay at FERS rates (e.g., about 0.8% to 4.4% of salary, depending on hire date); self-employed pay equivalent amounts directly to the Treasury.
- Employer contributions: Normal FERS rate (around 1% agency automatic + matching up to 5%), but reduced for small entities:
- Small employers (revenue ≤ $25 million): 50% reduction.
- Larger small employers (up to $100 million revenue): Graduated increase based on excess revenue.
- Self-employed (income ≤ $75,000): 50% reduction; up to $125,000: Graduated.
- Reductions can be adjusted or eliminated if a company has many high-paid workers; opt-out available to forgo reductions.
- Government covers shortfalls in reduced contributions via Treasury credits to the Thrift Savings Fund (TSP, FERS's investment plan).
- Thrift Savings Plan (TSP) Access:
- Non-federal employees and self-employed can contribute to TSP (up to 5% matching from employers/government).
- Similar reductions for small employers/self-employed on TSP contributions.
- Handles transfers, lost earnings, military service credits, and reemployment.
- Tax Incentives and Penalties (Internal Revenue Code Amendments):
- New tax credit (Section 36A): Up to 50% refundable credit on qualified pension contributions for small employers/self-employed who opt out of reductions; phases down based on revenue/income.
- Penalty tax (Section 4980J): $10 per day per affected employee/individual for failing to provide a covered program or make FERS contributions (inflation-adjusted after 2026; caps at $500,000/year for unintentional errors; waivable for reasonable cause).
- No double-dipping: Credits replace other deductions for these contributions.
- Protections:
- Employers cannot cut wages or other pay for existing employees to offset new retirement costs.
- Effective dates: Core requirements after December 31, 2025; tax changes for contributions after enactment.
Significant Changes to Existing Law
- FERS Expansion (Title 5, U.S. Code): Previously limited to federal civilian employees and Members of Congress; now includes private-sector workers and self-employed who opt in, redefining terms like "basic pay," "employee," and "creditable service" to cover non-federal roles. Adds provisions for non-federal deductions, contributions, and TSP participation.
- ERISA Integration: Ties private plans to FERS standards without fully federalizing them, allowing alternatives if "comparable."
- Tax Code (Internal Revenue Code): Introduces new credits and excise taxes not previously tied to FERS, shifting some retirement incentives from voluntary 401(k)s/IRAs to mandatory FERS-like systems. Coordinates with existing business credits (Section 38).
- Removes "civilian" restrictions throughout FERS statutes, broadening scope beyond government service.
Potential Impacts
- On Citizens/Workers: Improves retirement savings for millions in private jobs or self-employment by mandating employer matches and annuities, potentially reducing elderly poverty and reliance on Social Security. Self-employed gain access to low-cost federal plans, but face new contribution requirements.
- On Employers: Increases costs for retirement benefits (e.g., matching contributions), especially for small businesses without prior plans; offsets via reduced rates, tax credits, and opt-outs. Large firms may see minimal change if plans already match FERS.
- On Government Agencies:
- Department of Labor (DOL) and OPM gain oversight for approving "comparable" plans, processing elections, and computing reductions—could strain resources.
- Treasury/IRS handles tax credits, penalties, and funding shortfalls (e.g., crediting TSP for reductions), increasing administrative burden and federal spending.
- On International Relations: No direct impact; focuses on domestic labor and tax policy.
Main Stakeholders Affected
- Private-Sector Employees: Gain mandatory retirement benefits but may see payroll deductions.
- Employers (Especially Small Businesses): Face compliance costs, penalties for non-compliance, and tax relief options.
- Self-Employed Individuals: Required to contribute but eligible for reductions and credits.
- Federal Agencies: DOL (plan approvals, elections), OPM (FERS administration), IRS/Treasury (tax enforcement, funding).
- Taxpayers: Indirectly fund government contributions to cover shortfalls and credits, potentially raising federal deficits.
- Retirement Industry Providers: May need to adjust plans to meet FERS comparability standards.
Notable Legal, Constitutional, or Political Implications
- Legal: Creates enforceable mandates on private employers via tax penalties, potentially leading to litigation over "comparable benefits" determinations by DOL. Integrates FERS (a federal program) with private ERISA plans, raising questions on enforcement consistency.
- Constitutional: Could face challenges under the Commerce Clause (Congress regulating intrastate employment) or Tenth Amendment (federal overreach into state/private matters), similar to debates over Affordable Care Act mandates. No direct First Amendment or equal protection issues apparent.
- Political: Represents a progressive expansion of social safety nets, akin to universal healthcare pushes, but may spark opposition from business groups over costs and mandates. Bipartisan sponsors suggest potential appeal, though implementation funding could be contentious in budget debates.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Rep. Ramirez, Delia C. [D-IL-3]
Cosponsors (11)
Rep. Tlaib, Rashida [D-MI-12], Rep. Carson, André [D-IN-7], Rep. Thanedar, Shri [D-MI-13], Rep. García, Jesús G. "Chuy" [D-IL-4], Rep. McIver, LaMonica [D-NJ-10], Rep. Lee, Summer L. [D-PA-12], Rep. Stansbury, Melanie A. [D-NM-1], Rep. Omar, Ilhan [D-MN-5], Rep. McGovern, James P. [D-MA-2], Rep. Grijalva, Adelita S. [D-AZ-7], Rep. Deluzio, Christopher R. [D-PA-17]
Recent Actions
- 2026-02-12: Referred to the Committee on Ways and Means, and in addition to the Committees on Oversight and Government Reform, and 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.
- 2026-02-12: Referred to the Committee on Ways and Means, and in addition to the Committees on Oversight and Government Reform, and 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.
- 2026-02-12: Referred to the Committee on Ways and Means, and in addition to the Committees on Oversight and Government Reform, and 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.
- 2026-02-12: Introduced in House
- 2026-02-12: Introduced in House
Bill Versions
- Pensions for All Act — issued 2026-02-12 — PDF (33 pages)