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ASPPA Applauds Bill to Expand Retirement Savings

admin | February 21, 2012 | 0 Comments

Auto IRAs Provide Working Americans Greater Access to Retirement Security

ARLINGTON, VA (February 21, 2012)—The following is a statement from Brian Graff, Executive Director/CEO of The American Society of Pension Professionals & Actuaries (ASPPA) in response to a retirement security initiative proposed by Congress in HR 4049.

“We strongly support Representative Richard Neal’s (D-MA) proposal to expand the private retirement system with Automatic Individual Retirement Accounts (IRAs) because we believe it will allow millions of workers to save for retirement at work, without imposing a burden on the small employers that would become part of the private retirement system.

The Auto IRA proposal provides small employers who do not sponsor a qualified retirement plan with a tax credit for offering their employees’ retirement savings through automatic payroll deduction. Because the contribution limits for IRAs are less than for employer-sponsored 401(k) plans, Auto IRAs are expected to expand the availability of retirement savings, not replace current 401(k) plans. In fact, we believe that once employers participate in payroll reduction retirement savings arrangements, they will be more likely to step up to a 401(k) plan.

Research shows American workers that cannot already save at work are ready and willing to participate in Automatic IRAs plans. Calculations from the Employee Benefit Research Institute (EBRI) confirm that more than 70 percent of moderate-income earners with access to employer-sponsored plans participate in those plans, while less than 5 percent without employer-sponsored accounts contribute on their own to an IRA.

We believe the message is clear– employer-based retirement savings works—the challenge is to extend work-place savings opportunities to more workers. ASPPA joins with the Council of Independent 401(k) Recordkeepers (CIKR) in support of Congress’ proposed Automatic IRA program to expand coverage as a crucial step toward a secure retirement.

We look forward to working with Congress and to improve the retirement security of all American workers.”

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About ASPPA: The American Society of Pension Professionals & Actuaries (ASPPA) is a national organization of more than 8,500 retirement plan and benefits professionals that serves as the educator, voice, and advocate for the employer-based retirement system. ASPPA members are administrators, actuaries, advisors, attorneys, accountants, and other financial services professionals who provide consulting and administrative services for qualified retirement plans.

About CIKR: The Council of Independent 401(k) Recordkeepers (CIKR) is a national organization of 401(k) plan service providers. CIKR members are unique in that they are primarily in the business of providing retirement plan services as compared to financial services companies who primarily are in the business of selling investments. Collectively the members of CIKR provide services for over 68,000 retirement plans covering 2.8 million participants and holding in excess of $120 billion in assets.