U.S. Sen. Susan Collins proposed legislation Tuesday that would help small businesses offer retirement plans and make it easier for people to put money aside.

Collins told colleagues that many seniors in Maine “rely almost entirely on Social Security to cover their monthly expenses, despite the fact that the average annual benefit is only about $16,000 per year.”

“It is hard to imagine stretching those dollars far enough to pay the bills,” she said, adding, “Certainly a comfortable retirement is out of the question.”

The Retirement Security Act she introduced along with U.S. Sen. Bill Nelson, D-Fla., “would significantly improve the financial security of many Americans by reducing the cost and complexity of retirement plans, especially for small businesses, and encourage individuals to save more for retirement,” Collins said.

The senator said, though, that “the new retirement plan options for businesses included in our bill are just that — options. No business, large or small, would be required to offer its employees a retirement plan.”

“Adequate savings reduce poverty among our seniors,” she said.

Collins pointed to a Federal Reserve study that found nearly half of individuals of all ages do not have enough savings to cover an emergency expense of $400.

“That’s not even enough to buy new tires for a car,” Collins said.

“For this reason, among others, Americans need to increase their personal savings so that we can better weather financial emergencies without raiding our retirement accounts,” she said.

“As the chairman of the Senate Aging Committee, ensuring that more people are better prepared for retirement is one of my top priorities,” Collins said.

Nelson said the bill “will make it easier for folks, especially those working at small businesses, to start saving more now so they’re better prepared when they retire.”

The bill aims to reduce the $7.7 trillion gap the Center for Retirement Research says exists between what Americans have saved and what they need to retain their standard of living after they retire.

Research shows that employees are likely to contribute to retirement plans offered through their employers. But less than 10 percent of workers contribute to a plan if they don’t have one through their jobs. More than 30 million workers lack access to work-based retirement plans, according to the Pew Charitable Trusts.

Collins’ office said last year that 22 percent of workers at small companies have access to a workplace savings plan or pension compared to 74 percent at companies with 500 or more employees.

She introduced a similar proposal two years ago that was eventually folded into other legislation by the Finance Committee. Though it got the committee’s backing, it fell short of becoming law.

The Society for Human Resource Management strongly endorsed the measure two years ago.

It said that offering “a comprehensive and flexible benefits package is an essential tool in recruiting and retaining talented employees.”

It said that “removing barriers and disincentives, especially for small business, is a tactic that can lead to greater participation in employer-provided defined benefit retirement plans.”

Among the new bill’s provisions is one that would allow more businesses to share the administrative burden of a retirement plan, eliminating the required “nexus” among them in today’s law.

It would also order the Department of the Treasury to simplify and consolidate required notices in order to lower the cost of offering a plan.

In addition, the bill would prevent the Internal Revenue Service from challenging the tax benefits of plans that provide employees with an employer match on contributions of up to 10 percent of their pay. Existing law only lets employers match up to 6 percent.

The proposal would also tell the treasury to make the “saver’s credit,” which reduces the tax burden on low- and middle-income individuals who contribute to retirement plans, available on Form 1040EZ.

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