President Donald Trump's promise that workers whose employers don't contribute to their retirement savings will get access to the same type of retirement plan federal employees have has caught the attention of benefits attorneys, who said they have numerous questions about what that might look like.
During his State of the Union address Tuesday night, Trump announced a plan by his administration to give workers in 2027 "access to the same type of retirement plan offered to every federal worker."
"We will match your contribution with up to $1,000 each year, as we ensure that all Americans can profit from a rising stock market," the president said.
Here are four questions attorneys have about the president's plan to expand workers' retirement savings.
"Same" as Federal Workers' Plan?
A major question from attorneys has to do with understanding what, exactly, Trump refers to when he mentions an expansion coming next year.
When asked Wednesday for additional information on the proposal, a White House official told Law360 that details would be coming soon.
While additional policy changes could bolster the administration's plan, existing authorities were sufficient, the White House official said. That included language in the 2022 Secure 2.0 retirement policy bill that Congress passed regarding the "Saver's Match," which provides an avenue for a federal match of up to $1,000 annually for low-income workers, the official said.
Secure 2.0 changed a tax benefit for workers who contribute to their retirement savings from a nonrefundable saver's credit, paid in cash as part of a tax refund, into a government matching contribution of up to $1,000 a year deposited into income-qualifying workers' 401(k)-type plans or individual retirement accounts. The match is set to take effect in 2027, and attorneys have been asking for more guidance on implementation.
Lawmakers have also pushed to further expand access to portable defined-contribution retirement accounts, a policy effort that members of a U.S. Senate panel discussed during a June confirmation hearing for Daniel Aronowitz to lead the U.S. Department of Labor's Employee Benefits Security Administration.
David Levine, principal at Groom Law Group Chtd. who represents employers and plan sponsors, said an immediate question from Trump's announcement Tuesday was "what is this?" given that there are several existing proposals and forthcoming changes to law that expand access to workers' savings options.
"My first thought is Saver's Match; the most direct route is IRAs. Will it be more? We'll have to see," Levine said.
Paul Richman, chief government and political affairs officer at the Insured Retirement Institute, a retirement industry policy advocacy group, said he's also eager for more details on Trump's latest proposal. He framed the president's mention of retirement policy at the speech as a positive.
"To see him mention the issue of seeking to expand the opportunities for those that currently don't have access to retirement plans at their workplaces to save for retirement, we think that's another positive step to keep the conversations going," Richman said.
Richman said the IRI supported auto-IRA legislation from Rep. Richard Neal, D-Mass., that would require most employers to offer a retirement plan with automatic enrollment or pay an excise tax, as a way to expand on retirement savings policy that wouldn't involve more federal government programs.
"To us, we're not sure of the efficacy of the idea of setting up a whole new program or bureaucracy in the federal government" to advance the goal of expanding retirees' access to savings plans, Richman said.
Who Gets a Federal Match?
Another question for attorneys in the wake of Trump's announcement is who exactly would be entitled to a $1,000 maximum federal match, given the potential cost and implications for other programs.
The Saver's Match provision Congress passed in Secure 2.0 only applies to lower-income individuals.
Michael Fallings, managing partner at Tully Rinckey PLLC, a firm that represents workers on employee benefits issues, said he understood Trump's announcement to refer to changes coming under the Saver's Match. But he said that the pitch in the speech to provide $1,000 in federal matching funds raised questions about implementation of the federal match and who qualifies.
"Are you going to fund matching up to $1,000 for private-sector workers? I think that's going to be the question and concern," Fallings said.
Jennifer Neilsson, an employer-side partner in King & Spalding LLP's global human capital and compliance practice, said she was interested to see details on how Trump's expansion might work, including how deferrals and elections might work practically.
"Another question I have is, are some of the contribution limits — will they be across both the federal plan and private-employer plans? How would private employers implement those limits?" Neilsson said.
Are Nonfederal Plans Involved?
Practitioners said they also want to know whether Trump's pitch for expanded federal matching might be linked with other previously announced efforts by the administration to expand worker access to savings through other types of retirement plans that aren't federal.
For example, in the new Trump Accounts retirement savings program that Congress enacted in its 2025 budget legislation, the federal government has now committed to contribute $1,000 to the accounts for babies born this year through the end of 2028.
Andrew Oringer, partner at the Wagner Law Group and a longtime employer-side benefits attorney, said "it's at least possible that what they're talking about here is just more limited to a [mechanism] where the government is able to contribute additional monies to people's private retirement savings accounts."
Oringer added that Trump's remarks could be referring to federal government efforts more broadly to get money into savings plans "other than from the employer."
"The Trump accounts are like that, right? The Trump accounts are sort of blazing the trail for private-sector people and governments and governmental entities and all that to help boost retirement savings," Oringer said.
Will Social Security Be impacted?
How an expansion in the federal match to workers' retirement savings plans might interact with Social Security is also top of mind for attorneys, given that it's currently the biggest program the federal government administers for workers in retirement.
Neilsson, with King & Spalding, said another question she had from the announcement was "how does that interact going forward with Social Security and the policies related to that too?"
She added that while the details are still to come, the establishment of a new type of program for workers to set aside money for retirement outside their employer could require "legislation and then a fairly robust regulatory regime."
Neilsson said she had also assisted some states in setting up auto-IRA arrangements, "and it's complicated. It takes a while to launch these programs."
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