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Why shouldn't everyone have the same kind of retirement program enjoyed by members of Congress and federal workers? Good question. U.S. Sen. Jeff Merkley (D-Ore.) thinks everyone should.

Merkley today introduced the American Savings Act, which would give every American not covered by a retirement plan at work the chance to open a "universal, portable, simple" retirement plan similar to that available to federal employees. 

“It shouldn’t matter whether you work part-time or full-time, as an employee or as a contractor, or for a huge corporation or a tiny business: every American worker deserves access to a financially secure retirement,” said Merkley. “With private-sector pensions becoming rarer and rarer, Social Security and retirement savings are more important to retirement security than ever, which is exactly why we must strengthen Social Security and expand high-quality retirement savings options to all workers."

Merkley said his plan would help American workers "save easily and automatically for retirement with tax benefits, rock-bottom fees and the same types of high-quality investment options already enjoyed by federal workers and members of Congress.”

Current system failing

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Sen. Merkley

Merkley's action coincides with the release today by the Center for American Progress Action Fund's release of a new report recommending a program similar to Merkley's.

“When workers do not have access to a retirement plan at their workplace, either because their employer does not offer one or because of the nature of their work, they are unlikely to save for retirement," said David Madland, senior fellow at CAP Action. "Expanding access to a TSP-style plan could help shore up our private retirement system–which is currently failing to meet the needs of a significant part of our workforce–and offer a more secure retirement to millions of Americans.”

Merkley's measure won support from the Main Street Alliance, which represents small businesses.

“The Main Street Alliance member businesses applaud Senator Merkley’s leadership on this important issue,” said Amanda Ballantyne, National Director, The Main Street Alliance. “We look forward to working together to ensure that the American Dream of retiring comfortably after a lifetime of work is within reach for small business owners and their employees.”

The legislation is also supported by AARP and UNITE HERE.

Plan details

The American Savings Act would establish a new universal savings account plan — the American Savings Account.

If your employer doesn’t already offer a retirement plan, you’ll automatically be given your own American Savings Account (ASA). Initially, your employer will put 3% of your earnings into your account with each paycheck, but you can choose to adjust your contribution to as low as 2% of your income, or as high as $18,000 per year, or to opt out entirely. 

ASAs will have the same investment options as federal employees get through the TSP plan, with similar rock-bottom costs.ASAs are simple for employers, who simply need to send employees’ ASA savings to the federal government alongside employee tax withholdings. Workers will control their own accounts directly through a website.

Contributions to an ASA would be tax-deductible, and participants would be able to rollover any previous IRAs into their ASA or roll their ASA funds into an employer-sponsored 401(k) or 403(b) plan. An independent board of directors will manage the investment of the funds.


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