The Auto-Enrollment Workplace IRA Program: A Noble Endeavor in the Works

Report Summary

The Auto-Enrollment Workplace IRA Program: A Noble Endeavor in the Works

Now is the time for Congress to evaluate best execution of the federal retirement plan, using existing tools to improve efficiencies and ease employer burdens.

Boston, MA, August 25, 2010 – A new report from Aite Group provides details, as they are currently known, of pending legislation designed to help individuals lacking employer-sponsored 401(k) plans to save for retirement. The report, an update to Aite Group’s May 2009 report, New Government Agency Coming in 2010: The Department of Inefficiency, also highlights metrics on retirement savings in the United States.

The goal of the plan is to increase retirement savings among working Americans through increased retirement-account participation rates. Under the Automatic IRA Act of 2010 (S. 3760), employees that currently lack an employer-sponsored retirement plan would be offered an auto-enrollment plan by their employer. The processing approach set forth by the bill provides a less-than-optimal solution, however, as it generates many small monthly payments and requires employers to be involved, both of which could be avoided.

“Any effort to boost the retirement savings of Americans — particularly those in lower income brackets — is a noble endeavor,” says Doug Dannemiller, senior analyst with Aite Group and author of this report. “Now is the time for Congress to fine-tune the proposal, improving efficiencies and easing burdens placed on employers.”

This 13-page Impact Note contains eight figures. Clients of Aite Group's Wealth Management service can download the report.

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