Life Insurer Group Backs Federal Auto-Retirement Plan Requirement

The bill would impose an excise tax an affected employers that failed to offer an automatic contribution plan, and it would offer a tax credit for small employers that did offer automatic contribution plans.

Some provisions would grandfather in existing employer retirement plans set up under some state and local retirement programs already in effect.

The list of organizations supporting H.R. 4523 included the Insured Retirement Institute.

The ACLI's Views

ACLI says that the new version of Neal's bill could lead to 30 million more Americans having access to retirement savings, and to about 22 million more Americans saving for retirement.

"This bold approach is clearly needed to close the retirement savings gap and prevent a retirement crisis," ACLI President Susan Neely said in a statement included in the announcement of ACLI's endorsement. "People are living longer without adequate retirement savings and increasing access to workplace plans can be a powerful solution. This proposal is designed to make it easier for employers to offer retirement plans."

Workers could opt out, but studies have shown that about 80% of employees who have a chance to contribute to an employer-sponsored retirement plan do so, Neely said.

"Endorsing an employer requirement is not a policy shift that ACLI makes lightly," Neely said. "We believe the scope of the looming crisis demands fresh thinking. Automatically enrolling workers into a retirement savings plan is not a big new government program. It is a market-based solution that can help more people save more of their own money for the good of their families' futures. Family financial security is the ultimate peace of mind."

— Read IRI Backs 401(k) Mandate for Employers, on ThinkAdvisor.

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