Pensions for All Act
- Bill Number
- S. 2335
- Origin Chamber
- Senate
- Congress
- 119th Congress, Session 1
- Policy Area
- Labor and Employment
- Status
- Introduced
- Latest Action
- 2025-07-17: Read twice and referred to the Committee on Finance.
- Last Updated
- 2026-03-10T12:08:30Z
AI-Generated Summary
Pensions for All Act S. 2335, 119th Congress
Purpose
The legislation requires all employers to offer employees a retirement program providing benefits comparable to the Federal Employees Retirement System (FERS) or to enroll employees in FERS. It extends the same requirement to self-employed individuals and establishes mechanisms for participation, contributions, tax incentives, and penalties.
Key Provisions
- Mandatory Retirement Coverage: Employers must provide a "covered retirement program" (one the Secretary of Labor determines offers benefits comparable to FERS) or notify the Secretary that employees will participate in FERS. Self-employed individuals must enroll in a covered program or join FERS.
- Election and Switching: Employers and self-employed individuals may switch between a covered program and FERS at least annually.
- FERS Expansion: Amends Title 5, United States Code, to include "covered non-Federal employees" and "covered self-employed individuals" as participants eligible for FERS annuities, creditable service, and Thrift Savings Plan (TSP) benefits.
- Contribution Structure:
- Employees contribute the standard FERS employee percentage.
- Employers and self-employed individuals receive reduced employer contributions based on revenue or income thresholds (50% reduction for smaller entities, with phase-outs up to $100 million revenue or $125,000 income).
- Reductions may be waived to qualify for tax credits.
- Tax Credit: Creates IRC Section 36A, offering a credit equal to 50% of qualified pension contributions (phased out by revenue/income), available to employers and self-employed individuals electing full contributions.
- Penalties: Imposes an excise tax of $10 per day per affected employee or self-employed individual for failure to comply (capped at $500,000 per year for unintentional failures, adjustable for inflation).
- Compensation Protection: Prohibits employers from reducing existing compensation to offset new retirement requirements.
Significant Changes to Existing Law
- Broadens FERS eligibility beyond federal civilian service to private-sector and self-employed workers.
- Introduces a universal retirement mandate for all employers, replacing voluntary ERISA-based plans with a FERS-equivalent requirement.
- Modifies FERS contribution rules, creditable service calculations, and TSP provisions to accommodate non-federal participants.
- Adds new tax credit and excise tax provisions under the Internal Revenue Code.
Potential Impacts
- Government Agencies: Increases administrative responsibilities for the Department of Labor (determining comparability and enforcing rules), Office of Personnel Management (FERS oversight), and Treasury/IRS (tax credits and penalties). May affect FERS fund management.
- Citizens: Provides broader access to defined-benefit-style retirement benefits for private-sector workers and self-employed individuals.
- International Relations: No direct effects identified.
- Employers and Individuals: Raises compliance obligations, with partial offsets via reduced contributions or tax credits for smaller entities.
Main Stakeholders Affected
- Private employers (particularly small and mid-sized businesses).
- Employees in the private sector.
- Self-employed individuals.
- Federal agencies (Department of Labor, Office of Personnel Management, Internal Revenue Service).
- Existing retirement plan providers and administrators.
Notable Legal, Constitutional, or Political Implications
- Extends a federal retirement system to the private sector, potentially raising questions about federal authority over private employment benefits.
- Creates new regulatory and tax enforcement mechanisms with daily penalties and contribution adjustments.
- Includes anti-discrimination provisions tied to highly compensated employees in contribution reductions.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Recent Actions
- 2025-07-17: Read twice and referred to the Committee on Finance.
- 2025-07-17: Introduced in Senate
Bill Versions
- Pensions for All Act — issued 2025-07-17 — PDF (33 pages)