02.26.20
Talks Underway on ‘Retirement 2.0’ Savings Package
by: Doug Sword
Republicans and Democrats have begun discussing a new round of retirement savings legislation centered on House Ways and Means Chairman Richard Neal’s proposal to require businesses with at least 10 employees to offer retirement plans and automatically funnel a portion of their workers’ pay into savings. The default option under Neal’s proposal would be a Roth, which costs the government less upfront since taxes are taken out first, but ultimately it costs more decades down the road because the built-up savings aren’t taxed again. With a tax-deferred account, the Treasury takes in less in the early years but gets its cut when workers retire. The American Council of Life Insurers estimates Neal’s auto-enrollment plan would provide access to workplace plans for 30 million workers. Workers can opt out of participating, but ACLI estimates 22 million are likely to enroll, cutting in half the size of the workforce that currently doesn't have the opportunity to build up assets in an employer-sponsored plan.
Read the full article on Roll Call