Legislation to Help Military Families Save for Retirement Signed into Law

Washington, D.C. – U.S. Senator Susan Collins (R-ME), announced that the Military Spouses Retirement Security Act that she co-authored with Senators Maggie Hassan (D-NH), James Lankford (R-OK), and Michael Bennet (D-CO) was signed into law as part of the government funding package.  Their bipartisan legislation will help spouses of active duty service members save for retirement by expanding access to employer-sponsored retirement plans.

Many American households struggle to save for their golden years.  Spouses of active duty service members, however, face an additional hurdle to saving for retirement.  According to the Department of Defense, about one-third of military service members experience a permanent change of station move every year.  When service members move, their spouses often relocate with them, putting their own careers on hold.

“Like many Americans, spouses of active duty service members often face challenges when it comes to saving for retirement.  Military spouses also face one hurdle that many others do not: frequent moves and changes in employment,” said Senator Collins.  “By encouraging small employers to provide military spouses with accelerated access to retirement plans, employer contributions, and vesting, our bipartisan legislation will help to strengthen the financial security of these unsung heroes of our country’s national defense.”

Under the Military Spouses Retirement Security Act:

• Small employers – with 100 employees or fewer – who offer defined contribution plans will be eligible for a tax credit of up to $500 per year per military spouse.

• The credit will be available for three years per military spouse.

• The amount of the credit will be equal to $200 per military spouse plus 100 percent of all employer contributions for that spouse, up to $300.

• To receive the credit, small employers must meet the following criteria:

• Make a military spouse immediately eligible for retirement plan participation within two months of hire, and

• Upon plan eligibility, a military spouse must be eligible for any matching or non-elective contribution available to a similarly situated employee with at least two years of service, and must be 100 percent immediately vested in all employer contributions.

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