Rep. Richard Neal, D-Mass., introduced Wednesday the Automatic IRA Act of 2024, legislation that would require businesses with 10 or more employees to offer a workplace retirement plan.
These employers would be required to automatically enroll all full-time and long-term part-time employees in an automatic IRA or similar plan like a 401(k) plan. Workers could decline to participate or drop out at any time after enrollment.
Neal has been fighting for auto-IRAs since the plan was dropped from the Secure 2.0 Act.
The bill "also would build on, expand upon, and protect the growing state-facilitated automatic IRA retirement saving programs, which continue to pilot and give proof of concept to the proposed nationwide automatic IRAs," according to a summary of the bill.
"The state automatic IRAs show that automatic IRAs work," the summary states. "They demonstrate how automatic IRAs expand coverage directly to attack the racial, ethnic, gender, and low-income coverage and savings gaps and how they further strengthen the nation's private pension system by promoting wider adoption of 401(k) and similar employer-sponsored plans."
The bill would create a new tax credit of $500 per year for three years for employers of up to 100 employees that offer either a state or national automatic IRA, in addition to other existing tax credits, according to the American Retirement Association in Washington.
ARA, a trade group representing retirement and benefit plan professionals, "strongly supports the Automatic IRA Act that will significantly increase access to workplace retirement savings programs," Brian Graff, ARA's CEO, said Wednesday in a statement.
