H.R. 4718: Helping Young Americans Save for Retirement Act

This bill, titled the Helping Young Americans Save for Retirement Act, aims to amend existing laws related to retirement savings, specifically the Employee Retirement Income Security Act of 1974 (ERISA) and the Internal Revenue Code of 1986.

Eligibility Changes

The primary focus of the bill is to lower the minimum age for employees to participate in certain pension plans from 21 to 18 years. This change would allow young individuals to start saving for their retirement earlier.

• The bill proposes that an employee can become eligible for retirement planning if they are 18 years old and have worked at least 500 hours a year for two consecutive years.
• It clarifies that employees who qualify based solely on reaching the age of 18 will not be counted as participants until five years after they start participating in the plan.

Amendments to Existing Laws

To implement these changes, the bill makes several amendments to ERISA:

• Substitutes “18” for “21” in the eligibility criteria.
• Revises sections that currently address minimum participation standards for pension plans, adjusting for the new age requirement.
• Ensures that certain technical terminology is updated to reflect the changes in eligibility.

Impact on Retirement Plans

This bill modifies specific sections of the Internal Revenue Code related to 401(k) plans and other retirement savings vehicles:

• Changes the definition of periods for participation to allow for younger employees.
• Ensures that necessary tax compliance is maintained while accommodating these younger participants.

Effective Date

The amendments proposed by this act would come into effect for plan years beginning on or after one year from the date the bill is enacted.

Relevant Companies

None found.