H.R. 2696 — Retirement Savings for Americans Act of 2025

This section establishes the American Worker Retirement Fund in the U.S. Treasury as a non-appropriated trust fund consisting of participant contributions under section 105 of this Act and tax credit contributions by the Secretary of the Treasury under new IRC §25F, plus net investment earnings (or minus losses) and reduced by distributions and administrative expenses. The Fund maintains individual nonforfeitable participant accounts available without fiscal year limitation to invest assets, pay administrative expenses from earnings, make distributions and loans under section 106, and purchase insurance under section 209. Fund benefits are the exclusive property of participants or beneficiaries, non-assignable or alienable (except for participant loans), and protected from execution, levy, attachment, or garnishment except for (1) legal process to enforce child support or alimony obligations under section 459 of the Social Security Act (42 U.S.C. 659), (2) payments required under section 109 of this Act, and (3) federal tax levy under IRC §6331. (Thus, states and individual obligees may garnish Fund moneys and account balances for child support or alimony to the same extent as other federal remuneration-based payments.)

This section directs the Board of the American Worker Retirement Fund to establish investment policies and required investment options for participants, including (1) a Government Securities Investment Fund invested in U.S. government bonds and government-sponsored enterprise or corporation bonds; (2) a Fixed-Income Investment Fund invested in insurance contracts, certificates of deposit, and other fixed instruments managed by qualified professional asset managers; (3) a Common Stock Index Investment Fund; (4) a Small Capitalization Stock Index Investment Fund; (5) an International Stock Index Investment Fund; and (6) a Life-Cycle Investment Fund with target date asset allocation portfolios. The Board may add other options consistent with its fiduciary duties after consulting the Investment Advisory Council. This section further requires the Executive Director to invest Fund amounts according to participant selections made at least twice per year, with unallocated amounts defaulting to an age-appropriate Life-Cycle Fund; prohibits exercise of voting rights on Fund securities; and directs the Board to provide quarterly electronic reports (or mailed upon request) to participants and former participants on investment performance, including personalized retirement asset and income projections and benefits of maximum contributions for the section 25F tax credit match.

This section establishes that a qualifying worker is eligible to participate in the Fund upon completing the enrollment process in §104 and provides that a former participant is ineligible to contribute further under §105(a) but retains ownership of the funds (and net earnings) in their Fund account, subject to withdrawal conditions in §106, and may continue exercising investment decisions on the same basis as a current participant.

This section establishes a joint enrollment process by the Secretary of the Treasury and the Executive Director for participating employers to enroll qualifying workers in the Fund, incorporating contributions into federal tax withholding forms and payments and requiring completion within one year of the Fund's establishment for existing businesses. It requires automatic enrollment of qualifying workers at a default 3% contribution rate on compensation unless the worker elects to opt out (with opt-out election persisting unless reversed), and it permits businesses to elect enrollment for independent contractors without affecting their classification under federal, state, or local law. It imposes penalties on employers for failing to enroll workers or deposit contributions—2% of the amount for failures of not more than 5 days, 5% for more than 5 but not more than 15 days, and 10% for more than 15 days—plus payment of lost earnings to the Fund, and it directs Treasury to credit necessary sums to the Fund for implementation.

This section authorizes participants to make contributions to their accounts in the Fund from compensation (up to the full amount in any pay period), catch-up contributions permitted under IRC §414(v), and portions of tax refunds under IRC §6402 (excluding amounts attributable to the IRC §25F tax credit). It requires the Secretary of the Treasury and Executive Director to prescribe joint regulations for a program allowing participants to initiate, modify, or terminate regular contributions, with elections effective on the earliest feasible date and subject to annual limits under IRC §219(b)(5) (excluding IRC §25F contributions). The section further provides for automatic crediting of the Government Match Tax Credit under IRC §25F to participant accounts; treats participant contributions under subsection (a) as Roth contributions (i.e., includible in gross income with no IRC §219 deduction allowed); and directs joint regulations for depositing contributions into the Fund.

This section entitles former participants to withdraw the balance of their accounts from the Fund, subject to section 109, as (1) an annuity, (2) a single payment, (3) two or more substantially equal payments not less frequently than annually, or (4) any combination thereof as prescribed by regulation; permits additional partial withdrawals treated as single payments, including direct transfers to an eligible retirement plan; and authorizes changes to elections except after annuity contract purchase and prohibits return of distributions. The Board must prescribe annuity payment methods substantially similar to those under 5 U.S.C. 8434 (i.e., life annuity, joint-and-survivor annuity with a designated former spouse or insurable interest, with or without automatic annual adjustments not below the prior year's amount). (Thus, former participants receive fixed lifetime payments from a commercial annuity provider using account balances.) This section directs payment of an undesignated deceased participant's or former participant's full account value (as of death), subject to section 109; permits a surviving spouse (designated or default) to maintain their portion of the account with former participant withdrawal options under subsection (b) but without further withdrawals under subsections (h) or (i), contributions, or inheritance by the spouse's beneficiaries; and requires payout upon the surviving spouse's death. This section further requires single-sum payout of small account balances below a regulatory threshold (which may vary by age); and authorizes loans up to the value of participant contributions, subject to Thrift Savings Plan-like regulations, cost disclosures, and tax treatment limitations.

This section requires the Executive Director to establish and maintain an individual account in the Fund for each participant who contributes under section 105(a) or receives contributions under IRC §25F. The section defines each account balance as the excess of specified contributions and pro rata allocations of net investment earnings (reduced by a share of administrative expenses under section 101(e)) over Fund payouts attributable to the participant.

This section establishes tax treatment for the American Worker Retirement Fund similar to that of the Thrift Savings Fund—the defined contribution retirement plan for federal civilian employees and uniformed services members—under 5 U.S.C. 8440. (Thus, for Internal Revenue Code purposes, the fund is treated as a tax-exempt trust under IRC §401(a); contributions and distributions are taxed accordingly, with no constructive receipt for contribution elections; it is exempt from nondiscrimination rules under IRC §§401(k) and 401(m); and contributions count as wages for Social Security Act §209 and IRC §3121(a) purposes.)

This section applies the spousal protections under 5 U.S.C. §8435 and court order provisions under 5 U.S.C. §8467—applicable to the Thrift Savings Plan (TSP), a retirement savings and investment plan for federal employees and uniformed service members—to the governance of the Fund and accounts of its participants and former participants. The section further directs the Executive Director to issue regulations establishing spousal protections and survivor rights for such participants that are as equivalent as practicable to those provided under the TSP pursuant to chapter 84 of title 5, U.S. Code.

This section establishes the American Worker Retirement Investment Board (Board) in the executive branch to oversee investment and management of the Fund (established elsewhere in title I), administer title I of the Act, and develop related financial literacy requirements for participants (e.g., prior to early withdrawals or loans). The five-member Board consists of (1) three presidential appointees, one designated Chair; (2) one appointee made after considering the Senate majority leader's recommendation (in consultation with the minority leader); and (3) one appointee made after considering the House Speaker's recommendation (in consultation with the minority leader). All appointments require Senate confirmation; members must have expertise in financial investments and pension plans and may not be federal officers or employees; terms are four years (initial terms staggered at four, three, and two years). The Board must (1) establish investment, management, and administrative policies; (2) hire and compensate the Executive Director; (3) review Fund investment performance and approve the Board's budget; and (4) develop evidence-based financial literacy requirements. The Board may direct the Executive Director (except on specific investments, with a limited exception), remove the Executive Director upon four concurring votes for good cause, and take other necessary actions, discharging duties solely in participants' interests. The Board submits its annual budget to the President and congressional committees for inclusion as a separate item in the President's annual budget under 31 U.S.C. 1105 and may submit legislative recommendations to the President and Congress.

This section establishes the American Worker Retirement Plan Advisory Council, composed of seven members appointed by the Chair of the Board—(1) three with experience managing investment funds, (2) two with experience operating small businesses, and (3) two with experience providing investment advice to small businesses and low-income workers. The Chair designates the head of the Council; members serve four-year terms, with vacancies filled for the unexpired term of the predecessor; the Council acts by majority resolution; and the Council advises the Board and Executive Director on investment policies for the Fund and administration of title I of the Act and performs other duties as directed by the Board with respect to title I investment funds.

This section establishes the position of Executive Director of the Board, to be appointed by majority vote of Board members without regard to competitive service appointment laws and to possess substantial experience, training, and expertise in financial investments and pension benefit plans. The section specifies the Executive Director's duties, including carrying out Board policies; investing and managing the Fund according to Board policies; administering the Act; prescribing non-fiduciary regulations; meeting with the Council as requested; and enforcing Board-established financial literacy requirements. The section further authorizes the Executive Director, subject to Board approval where noted, to (1) prescribe non-fiduciary regulations; (2) appoint necessary personnel; (3) procure temporary or intermittent services of experts and consultants under 5 U.S.C. §3109 (i.e., without regard to competitive service laws, classification/pay statutes, or certain procurement laws, subject to statutory pay limits); (4) make payments from the Fund; (5) pay compensation, per diem, and travel expenses for personnel, experts, and consultants from the Fund; (6) delegate functions to Board employees with successive redelegations; and (7) take other appropriate actions.

This section directs the Board to develop investment policies providing for (1) prudent investments suitable for accumulating funds for retirement income and (2) low administrative costs. The section further requires the Board to select asset managers for the Fund such that no manager is responsible for more than the greater of $500 billion or 10% of the Fund's assets and to limit any such contract to a maximum of five years.

This section establishes administrative provisions for the Board, including (1) requirements for meetings not less than once each month and at additional times at the call of the Chair; (2) governance procedures specifying that the Board acts by majority vote of a quorum of 3 members (with vacancies not impairing quorum authority, except as provided in section 201(g)(1)(C)); and (3) compensation for members at the daily rate of basic pay for level IV of the Executive Schedule, plus travel, per diem, and other necessary expenses, paid from the Fund as administrative expenses under section 101(e).

This section establishes fiduciary responsibilities with respect to the Fund (defined elsewhere in the Act), including definitions of “account” (not limited by section 2), “adequate consideration” (generally the prevailing price on a registered national securities exchange or fair market value determined in good faith), “fiduciary” (e.g., Board members, Executive Director, or persons with discretionary control over Fund assets), and “party in interest” (e.g., fiduciaries, service providers, participants, and related entities with 50% ownership or 10% holdings). It requires fiduciaries to act solely in the interests of participants and beneficiaries for providing benefits and defraying reasonable administrative expenses; with the care, skill, prudence, and diligence of a prudent person; and, to the extent permitted by section 102, by diversifying investments to minimize risk of large losses. The section further prohibits (1) maintaining indicia of ownership of Fund assets outside U.S. district court jurisdiction; (2) specified transactions with parties in interest (e.g., asset transfers, property acquisitions/sales, service exchanges) unless for adequate consideration; and (3) self-dealing, acting for adverse parties, or receiving personal consideration from Fund-related transactions. The Secretary of Labor may grant conditional or unconditional exemptions from restrictions in paragraph (d)(2) via regulation.

This section requires bonding for each fiduciary and person handling funds or property of the Fund, except for certain supervised corporations authorized to exercise trust powers or conduct insurance business with combined capital and surplus exceeding a minimum of $1 million (as prescribed by the Secretary of Labor); banks or financial institutions not insured by the Federal Deposit Insurance Corporation qualify only if meeting equivalent state bonding standards. It directs the Secretary of Labor to prescribe bond amounts annually at the start of each fiscal year—not less than 10% of funds handled (min. $1,000, max. $500,000, or higher after notice and hearing)—determined by prior fiscal year handling or current year estimates. (Thus, bonds protect the Fund against fraud or dishonesty by the bonded party or connivance with others; must use corporate sureties acceptable for federal bonds; and may be individual, schedule, or blanket forms approved by the Secretary.) It prohibits any unbonded person from receiving, handling, disbursing, or exercising custody or control over Fund funds or property and bars fiduciaries from permitting such actions; exempts compliance from other bonding laws; and authorizes the Secretary to issue regulations, including further exemptions.

This section applies to violations of sections 206 and 207 the investigative authorities available to the Secretary of Labor under section 504 of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1134). (As background, those authorities allow the Secretary to require submission of reports, books, records, and data; enter places, inspect records, and question persons upon reasonable cause to believe a violation exists; and apply witness attendance and document production rules under 15 U.S.C. 49 and 50, subject to a limit of one records submission per plan in any 12-month period absent reasonable cause.)

This section (1) voids any provision in an agreement or instrument purporting to relieve a fiduciary from responsibility or liability under this title; and (2) authorizes sums credited to the Fund, in accordance with section 101(e), to pay administrative expenses that may include, at the Executive Director's discretion, insurance covering potential liability of Fund fiduciaries without regard to whether the policy permits insurer recourse against the fiduciary for breach of fiduciary duty.

This section establishes subpoena authority for the Executive Director to compel production of books, documents, records, electronically stored information, or tangible materials to carry out the Act's responsibilities. It provides immunity from liability for good faith compliance, authorizes district court enforcement with contempt penalties for noncompliance, and directs the Executive Director to issue implementing regulations.

This section establishes the Government Match Tax Credit (new IRC §25F) for eligible individuals (i.e., participants in the American Worker Retirement Fund created under the Retirement Savings for Americans Act of 2025). The credit equals the sum of (1) 1% of the eligible individual's gross income and (2) the applicable percentage of that individual's contributions to the fund during the taxable year—specifically, 100% of contributions up to 3% of gross income, 50% of contributions exceeding 3% but not over 5% of gross income, and 0% of contributions over 5% of gross income. The credit is capped at 5% of the phaseout amount for the individual (reduced by $75 for each $1,000 or portion thereof that gross income exceeds the phaseout amount), where the phaseout amount equals 200% of applicable median income (i.e., most recent Census Bureau median personal income for persons age 15 and over) for joint returns, 150% (3/4) for heads of household, and 100% (1/2) for others. Instead of offsetting tax liability, the credit amount is treated as an overpayment and deposited directly into the individual's fund account (with advance payment regulations permitted using prior-year gross income and excess advances recouped as additional tax); contributions forfeited if withdrawn within six months are returned to the Treasury (with earnings available for fund administration, neither includible in the individual's income); and such contributions are ineligible for the savers credit under IRC §25B. The amendments apply to taxable years beginning after the date specified in the provision.