Presidential hopeful Sen. Elizabeth Warren, D-Mass., is working on a bill to allow expanded access to 401(k) plans for part-time workers, while her colleague Sen. Rand Paul, R-Ky., has introduced legislation to give access to 401(k)s for paying student loans, according to news reports.
Warren’s proposal, the Part-Time Worker Bill of Rights Act, aims to “strengthen protections” for such workers in general, according to announcement on the senator’s website cited by FA-IQ sister publication Ignites.
The bill, co-sponsored by Rep. Jan Schakowsky, D-Ill., would provide part-time workers who’ve worked at least 500 hours a year for two consecutive years access to the company’s 401(k) plan when one is available to full-timers, according to Ignites.
The bill would also provide Family and Medical Leave Act benefits to part-time employees, as well as require large employers to give available work to current part-time workers before hiring new employees or subcontractors, the publication writes.
Warren and Schakowsky cite research suggesting that some employers spread part-time work around to eschew paying benefits and higher wages to drive corporate profits, according to Ignites.
The bill is scheduled to be introduced next month, Schakowsky’s communications director tells the publication.
Meanwhile, Paul’s Higher Education Loan Payment and Enhanced Retirement (Helper) Act, introduced Tuesday, would allow tax-free withdrawals of up to $5,250 to 401(k) plan participants to pay for college or cover their student loans, according to Ignites.
Workers would also be able to withdraw that amount to cover tuition or loans for their spouses or dependents, the publication writes, citing a press release on Paul’s website.
While Paul’s bill is aimed at addressing the more than $1.6 trillion in student loan debt in the country, it’s already drawn criticisms, according to CNBC.com.
Critics point to a Northwestern Mutual study that found that around 22% of Americans have less than $5,000 saved for retirement, only 5% have between $5,000 and $24,999 and only 16% have saved more than $200,000, according to the TV news channel’s website.
And 25% of Americans have no retirement savings at all, CNBC.com writes, citing recent data from the Federal Reserve.
Moreover, financial experts advise against using 401(k) plans to pay for a child’s college and suggest that individuals should avoid tapping their retirement savings in general, according to the website.