Last month President Obama proposed legislation that would automatically enroll new workers in an IRA if they lack access to a 401(k)-type plan through their employer. According to Labor Secretary Tom Perez, Congress failed to act and it became necessary for the federal government to take action. The plan would call for requirements to automatically enroll employees and for employers to offer coverage, for workers who don’t currently have access to a 401(k) at work.
A number of states have passed laws requiring employers that do not offer workplace retirement plans to automatically enroll new employees into IRAs. Other states encourage businesses to participate.
Still others have favored approaches that combine several retirement planning alternatives, including IRAs, 401(k) plans and the Treasury’s starter savings program, myRA. Washington and Illinois have approved state-run automatic savings programs for companies that don’t offer their own retirement plans to employees.
“We want to do everything we can to encourage more states to take this step,” Mr. Obama said. “And if every state did this, tens of millions more Americans could save for retirement at work.”
More than anything the American people need to take control of their retirement plans now and not wait for the government to create another mechanism to do something they can do on their own.
“The government as a solution provide access for 30 million Americans to workplace-based retirement savings by requiring employers not currently offering a retirement plan to automatically enroll their workers in an IRA, we don’t think that is necessary.” said Don Miller at http://www.iramarketreport.com/ “We look at it as more of a personal responsibility matter,” he added.
In a recent study 87% of workers believe it’s their personal responsibility to build their retirement nest egg, and 77% are aware of their need to plan ahead for retirement.