Trump Targets 401(k) Gap With Savings Plan for Uncovered Workers (1)

Millions of private-sector workers without employer-sponsored retirement savings plans could gain access to new tax-advantaged plans similar to one in place for federal workers, President Donald Trump pledged in his State of the Union speech Tuesday night.

The new 401(k)-type plan would be modeled after the low-fee federal Thrift Savings Plan, or TSP, to remedy what Trump termed “the gross disparity” between the roughly 50% of the population who have access to workplace retirement savings plans and those who do not. Workers could get a matching contribution from the government of as much as $1,000 a year.

It wasn’t immediately clear how much of the plan would deviate from a measure already set to take effect next year under a law passed under former President Joe Biden’s administration. Trump is planning to change the program to some extent, but details weren’t available.

The Insured Retirement Institute said in a statement that it was “encouraged” by the president’s comments but “eager to learn more details.” Senate Minority Leader Chuck Schumer accused the president of simply repackaging the Biden-era program.

“Trump hasn’t done anything for middle class Americans, so he has to steal Biden’s accomplishments,” the New York Democrat said in a social media post.

Some 56 million private-sector employees work for companies that do not offer an employer-sponsored retirement savings plan, according to AARP. A White House official said Trump’s program offered a government match, portfolio choices and index-based investment options that could help workers who have been overlooked to build retirement savings.

The proposal, described in broad brush strokes in the State of the Union address, was one of several measures mentioned that were aimed at assuaging the financial concerns of everyday Americans with midterm elections approaching.

The official acknowledged that Trump’s plan was based on the Savers Match program from the 2022 “Secure 2.0” legislation passed during the Biden administration.

Trump will seek to modify the structure to ensure portability and allow for philanthropic contributions as well, the official added. The administration will have more announcements on the details, the official said.

There has been bipartisan support for similar retirement savings proposals for some time. National Economic Council Director Kevin Hassett has supported a similar concept, and advocated during the Biden administration for the advancement of legislation to create a TSP-like plan for private-sector workers lacking employer-sponsored retirement plans. In 2021, Hassett and Teresa Ghilarducci, an economist with the New School for Social Research in New York, wrote a Washington Post op-ed entitled, “Everyone Should Have the Retirement Plan Federal Employees Enjoy.” In the piece, the authors referred to the Thrift Savings Plan as “one of the best-designed savings programs in US history.”

Another bipartisan approach at providing financial security for lower-wage workers without access to 401(k)-type plans has been proposed in the Retirement Savings for Americans Act. The bipartisan legislation was reintroduced in 2025, by Senators John Hickenlooper and Thom Tillis, and Representatives Lloyd Smucker and Terri Sewell. The plan envisioned would create a program to offer eligible workers portable, tax-advantaged retirement savings accounts, and the federal government would be able to match the savings contributed by low- and middle-income workers.

(Updates to add Schumer, IRI in fourth paragraph)

To contact the authors of this story:
Suzanne Woolley in New York at swoolley2@bloomberg.net

Josh Wingrove in Washington at jwingrove4@bloomberg.net

To contact the editor responsible for this story:
John Harney at jharney2@bloomberg.net

Laura Davison

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