This bill establishes a universal retirement savings requirement, mandating that every employer provide their employees with a retirement program. This program must either be a covered retirement program, which the Secretary of Labor determines offers benefits comparable to the Federal Employees Retirement System (FERS), or the employer must elect for their employees to participate directly in FERS. Similarly, all self-employed individuals are required to enroll in a comparable private retirement program or opt into FERS. Employers and self-employed individuals are granted the flexibility to switch between a covered retirement program and FERS participation at least annually.

To facilitate this, the bill significantly amends Title 5 of the U.S. Code, expanding the definition of "employee" and "creditable service" within FERS to include non-federal employees and self-employed individuals. This allows these new participants to contribute to and receive benefits from FERS, including its annuity and Thrift Savings Plan (TSP) components. Employers of non-federal employees and self-employed individuals will make contributions to FERS and TSP, mirroring the structure for federal employees.

The legislation includes provisions to ease the financial burden on smaller entities. For instance, covered non-federal employers with annual revenue up to $25 million and self-employed individuals with basic pay up to $75,000 receive a 50% reduction in their FERS and TSP employer contributions. A scaled reduction applies to slightly larger entities. Alternatively, eligible employers and self-employed individuals who opt out of these contribution reductions can claim a new tax credit for qualified pension contributions, also scaled based on revenue or income.

To ensure compliance, the bill introduces a new excise tax on employers and self-employed individuals who fail to meet these retirement program requirements. This tax is set at $10 per day per employee or individual in non-compliance, with inflation adjustments and limitations for unintentional failures. Crucially, the bill also prohibits employers from reducing any form of employee compensation due to the new mandatory retirement program contributions.