Pensions for All Act

This bill requires every employer to provide employees a retirement program with benefits equivalent to the Federal Employees Retirement System (FERS) or to elect for employees to participate in FERS. It also covers self-employed individuals. The bill defines terms, sets requirements for offering or joining FERS, allows annual switching between options, and amends FERS law to include non-federal employees and self-employed individuals. It creates a tax credit for small employers and self-employed individuals for pension contributions, imposes a tax penalty for failing to provide a required retirement program, and prohibits employers from reducing compensation due to the new retirement requirements.

Sec. 2, Definitions: Defines key terms: 'covered retirement program' means a non-FERS retirement program the Secretary of Labor finds provides benefits comparable to FERS; 'employer' and 'employee' have the same meanings as under ERISA; 'FERS' is the Federal Employees Retirement System; and 'Secretary' means the Secretary of Labor.

Sec. 3, Requirement to provide a retirement plan equivalent to FERS or to participate in FERS: Each employer must either offer a covered retirement program to all employees or notify the Secretary that employees will participate in FERS. Self-employed individuals must either enroll in a covered retirement program or notify the Secretary they will participate in FERS. At least annually, employers and self-employed individuals may switch between a covered retirement program and FERS.

Sec. 4, Participation of non-federal employees and self-employed individuals in FERS: Amends FERS law to define 'covered non-Federal employer' (a non-federal employer without a comparable retirement plan), 'covered non-Federal employee', and 'covered self-employed individual'. These individuals become eligible for FERS annuities, and their service counts as creditable service. Employee and employer contribution rules are added, with reduced contribution rates for smaller employers (annual revenue up to $100 million) and lower-income self-employed individuals (basic pay up to $125,000). The Thrift Savings Plan is also opened to these groups, with similar contribution reductions.

Sec. 5, Credit for small employer and self-employed pension contributions: Creates a new tax credit for eligible taxpayers equal to a percentage of qualified pension contributions. The credit percentage is 50%, reduced for larger employers (gross receipts over $25 million) and higher-income self-employed individuals (income over $75,000). The credit is part of the general business credit for employers, and no double benefit is allowed.

Sec. 6, Failure to provide covered retirement program: Imposes a tax of $10 per day per employee or self-employed individual for failing to provide a required retirement program or make required FERS contributions. The tax is capped at $500,000 per year for unintentional failures, and the Secretary may waive it if payment would be excessive. The tax applies to plan years beginning after December 31, 2025.

Sec. 7, Prohibition on the reduction of compensation: An employer may not reduce any form of compensation for an employee employed on or before the bill's enactment date due to the requirement that the employee be enrolled in a covered retirement program or FERS.