Washington, DC –A recent AARP survey found that 71 percent of American small business workers who lack access to an employer-provided retirement savings plan say employers should be required by law to offer workplace access to an individual retirement account (IRA).
The report, “Auto IRAs: Worker Attitudes and Likelihood of Participation,” also found that 79 percent of workers without workplace access to savings say they would participate in a plan that regularly deducted savings from their paycheck.
“With the disappearance of traditional pension plans, saving for retirement today is not the same as it was twenty years ago,” said Tom Nelson, Chief Operating Officer at AARP. “American workers know they need to save, and we should do all we can to help them. They need access to workplace savings plans to build an adequate nest-egg and lifetime financial security.”
An earlier AARP report found that 48 million workers – nearly two-thirds of the 75 million working Americans without current access to employer-sponsored retirement plans – could benefit from automated IRAs.
“Next week, the House Education and Labor Committee will take a closer look at the half of the American workforce that doesn’t have any way to save for retirement,” said Nelson. “It’s imperative that these conversations take place so that solutions can be found and put into action. Ideas have been put on the table, now it’s time to come together and support those changes that best suit the long-term financial needs of workers.”
Auto IRA legislation has been introduced in the Senate by Senators Jeff Bingaman (D-NM) and Gordon Smith (R-OR). Companion legislation has been introduced in the House by Representatives Richard Neal (D-MA) and Phil English (R-PA).
The Automatic IRA Act of 2007 focuses on employers with more than 10 employees and that have been in business for at least two years. For employers who do not offer a retirement plan for their employees, this would facilitate a direct-deposit payroll deduction option into an IRA at a financial institution. Employers would receive a tax credit for providing the direct deposit mechanism but would not have to contribute to such an account, nor would they hold any liability for investment decisions.
For more information about Auto IRA legislation, studies and facts, visit http://www.aarp.org/research/financial/ira/auto_ira_worker.html.
AARP is a nonprofit, nonpartisan membership organization that helps people 50+ have independence, choice and control in ways that are beneficial and affordable to them and society as a whole. AARP does not endorse candidates for public office or make contributions to either political campaigns or candidates. We produce AARP The Magazine, published bimonthly; AARP Bulletin, our monthly newspaper; AARP Segunda Juventud, our bimonthly magazine in Spanish and English; NRTA Live & Learn, our quarterly newsletter for 50 + educators; and our website, www.aarp.org. AARP Foundation is an affiliated charity that provides security, protection, and empowerment to older persons in need with support from thousands of volunteers, donors, and sponsors. We have staffed offices in all 50 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands.