Starter-K Companion Legislation Introduced in House

Representatives Linda T. Sánchez (D-CA) and Darin LaHood (R-IL) introduced the Starter-K Act, legislation intending to expand access to retirement savings for more Americans. Companion legislation was introduced in the Senate by Senators John Barrasso (R-WY) and Tom Carper (D-DE).

The bill provides for a deferral only 401(k) or 403(b) arrangement with a minimum three percent automatic deferral rate and maximum deferral limit of $6,000 (indexed for inflation). Catch-up contributions would be available for those age 50 and over, subject to the same limit as for SIMPLE plans (currently $3,000). These plans would be afforded a safe harbor from nondiscrimination and top-heavy requirements. The Department of Labor would be directed to provide rules for simplified reporting under these arrangements.