S 1707119th CongressIn Committee

Helping Young Americans Save for Retirement Act

Introduced: May 12, 2025

Economy & TaxesFinancial Services

Standard Summary

Comprehensive overview in 1-2 paragraphs

The Helping Young Americans Save for Retirement Act would lower the minimum participation age for ERISA-covered pension plans and certain qualified accounts by creating an 18-year-old eligibility pathway in addition to the existing age 21 rule. Under the bill, an 18-year-old can become eligible for participation if they meet either (a) the existing period-permitted test with the age 21 replaced by 18, or (b) an hours-based test requiring two consecutive 12-month periods with at least 500 hours of service in each period. The bill also adds a special rule to prevent counting employees who participate solely because of the 18-year-old eligibility option for minimum-participation testing for five years after they first become participants. In the Internal Revenue Code, similar age-18 eligibility rules apply to 401(k) plans (and related provisions for 403(b) plans) with the same hours-based alternative. The legislation includes conforming amendments to update references and terminology and would apply to plan years beginning one year after enactment. It also requires an independent qualified public accountant’s opinion in certain circumstances related to the counting of participants.

Key Points

1Lowers minimum participation age to 18 for pension plans and certain qualified accounts, via two paths: (A) the period permitted under the law with 18 substituted for 21, or (B) a 24-month, two consecutive 12-month periods with at least 500 hours per period.
2For defined benefit/pension plan counting, introduces a special rule: any employee who participates solely because of the 18-year-old eligibility may not be counted as a participant for minimum-participation purposes until five years after the first such employee begins participation.
3Applies the same age-18 eligibility approach to the Internal Revenue Code, specifically 401(k) plan rules, with aligned conforming amendments to 401(k)(15) and 403(b)(12) to cover younger workers and adjust cross-references.
4Requires an independent qualified public accountant to provide an opinion for purposes related to the new counting rules for plans that include participants who only qualify due to the 18-year-old provision.
5Effective date: the amendments apply to plan years beginning one year after enactment.

Impact Areas

Primary group/area affected: Young workers aged 18-20 who seek to participate in pension plans, 401(k) plans, and certain other qualified accounts; employers and plan sponsors administering ERISA plans.Secondary group/area affected: Plan administrators, HR/payroll professionals, and financial/tax advisers who implement and monitor eligibility and hours-based service requirements.Additional impacts: Potential administrative and systems changes to track hours and eligibility for 18-year-olds, adjustments to plan documents to reflect younger-worker participation, and transitional considerations due to the five-year non-counting rule for early entrants. The policy aims to broaden access to retirement saving at a younger age but may increase initial administrative complexity for employers and require careful communication with employees about eligibility and plan provisions.

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