AARP Supports Auto IRA Bill Introduced in House
Bipartisan Legislation Aims to Give Workers Retirement Savings Option
Source: AARP Press Center | May 3, 2007
David Sloane, AARP’s Senior Managing Director of Government Relations and Advocacy, issued the following statement today in support of bipartisan legislation introduced in the House of Representatives to provide for automatic IRAs in the workplace. The legislation is a companion bill to that introduced recently in the Senate by Senators Jeff Bingaman (D-NM) and Gordon Smith (R-OR). The Senate bill is S.1141.
“AARP supports the bipartisan legislation introduced in the House today by Representatives Richard Neal (D-MA) and Phil English (R-PA) to provide for an automatic Individual Retirement Account (IRA) option for millions of hard-working Americans currently without access to an employer-provided retirement plan. We applaud Reps. Neal and English for their leadership on this key issue.
Business, government and individuals all have a part in fostering retirement security. One way to do this is through an automatic payroll deduction, which is a practical, effective, and low-cost way to provide a retirement savings option. At the same time, the bill would provide employers with a tax credit to help offset costs and would protect the employer from liability for individual investment choices.
If passed, this proposal would provide a much-needed boost to our historically low rate of household savings. Congress has focused attention in the past few years on the private pension system, but has not sufficiently examined another problem of equal concern—that nearly half of the workforce has no access to any kind of retirement plan or payroll deduction savings mechanism through their employer.
This year’s AARP Retirement Security Survey found great enthusiasm for employer-based Auto IRAs. Nearly eight in 10 said they agreed that employers who do not offer some type of retirement plan should be required to offer workers the option to regularly save a part of their paycheck, regardless of whether the employer contributes to the account.
AARP has worked closely with other proponents in recent years in developing an automatic payroll deduction IRA proposal. We are hopeful that Congress and the White House will act promptly to improve the opportunities for America’s workers to save for a financially secure retirement.”
