Rep. Sewell Introduces Legislation Reducing Barriers for Part-Time Employees to Begin Saving for Retirement
Washington, D.C. - Today, U.S. Rep. Terri Sewell (AL-07) announced her introduction of H.R. 2944, the Reducing the Maximum Service Requirement for Long-term Part-time Workers to Make Elective Deferrals to 401(k) Plans Act. The bill would allow for part-time employees to begin saving for retirement sooner by reducing the number of years of service required to make retirement contributions. H.R. 2944 was included in a larger bill, the Securing a Strong Retirement Act of 2021 (also known as the SECURE Act 2.0), which would improve incentives for working class Americans to save for retirement.
“This Congress, I introduced H.R. 2944, Reducing the Maximum Service Requirement for Long-term Part-time Workers to Make Elective Deferrals to 401(k) Plans Act. This is a common-sense bill that will make it easier for part-time employees to begin contributing to their retirement accounts sooner in their employment,” said Rep. Sewell. “We know that Alabama’s working families are facing a retirement crisis. Too often, the incentives to save for retirement are designed to benefit the wealthy and the upper-middle class. This is a fundamental inequity in our tax code, and we must rebalance retirement incentives so that all working individuals can retire with dignity and financial security.”
“I am also pleased that my bill was included in H.R. 2954, the SECURE Act 2.0, which passed out of the Ways and Means Committee this week,” continued Sewell. “This larger package includes a number of provisions that will expand retirement coverage and increase participation in retirement savings by realigning savings incentives to benefit middle class and working class families. In my district, where the median household income is $38,000 a year, saving for retirement can seem overwhelming. That is why I am committed to breaking down traditional barriers to saving for retirement.”
Background on H.R. 2944
The Reducing the Maximum Service Requirement for Long-term Part-time Workers to Make Elective Deferrals to 401(k) Plans Act amends the long-term part-time years of service 401(k) participation requirement included in the 2019 SECURE Act. As women are more likely to work part-time than men, this provision is particularly important for women in the workforce. The SECURE Act provides that except in the case of collectively bargained plans, employers maintaining a 401(k) plan must have a dual eligibility requirement under which an employee must complete either a one year of service requirement (with the 1,000-hour rule) or three consecutive years of service where the employee completes at least 500 hours of service. H.R. 2944 reduces the three-year rule to two years, allowing for part-time employees to begin saving for retirement sooner.
H.R. 2944 can be found here.