The Retirement Savings for Americans Act (RSAA), introduced to Congress in 2022, before SECURE 2.0 became law, and then reintroduced again in 2023, aims to expand retirement coverage for American workers by creating a federal retirement plan for those not covered by their employer. However, the Morningstar Center for Retirement & Policy Studies has published new research, which finds that the RSAA would likely lead to worse retirement outcomes for most Gen Z and millennial workers.

"The Retirement Savings for Americans Act would likely change investor savings behavior and plan sponsor behavior," Spencer Look, associate director of retirement studies at the Morningstar Center for Retirement & Policy Studies, explained. "For example, employers would be less likely to offer a plan because the proposal's federal match tax credit would effectively subsidize some portion of the employer's contributions. This impacts retirement-income adequacy because savings rates in defined contribution plans are a lot higher than the bill's 3% default rate. This is also true for lower-income workers.

"The bill would likely improve outcomes for workers without access to a plan throughout their career, but to be clear, these benefits would come at the cost of retirement prospects for others."