Obama to propose expanding retirement plans – USA TODAY
WASHINGTONÂ â Changes that President Obama will propose to employer-sponsored retirement plans couldÂ help 30 million American workers have access to retirement savings, the White House said Monday.
Obama’s plan consists of of a number of legislative proposals, which he’ll outline in the 2017 budget he’ll submit to Congress next month. They include:
âºÂ OfferingÂ tax credits to small businesses that automatically enroll employees in a 401(k)-styleÂ retirement plan;
âº RequiringÂ companies with existing plans to offer them to long-term, part-time workers who work 500 hours a year for three years;Â and
âº MakingÂ it easier for companies to pool their retirement plans to bring down expenses through multiple employer plans.
The White House previewed the proposals for reporters Monday but did not immediately reveal their budgetary impact. In addition to the newly proposed tax credits for businesses, the changesÂ would give millions of Americans a tax cut by allowing them to defer taxes on their retirement savings.
The retirement proposals are part of an economic security agenda Obama outlined in his State of the Union address this month, which also included a call to expand unemployment benefits.Â “For Americans short of retirement, basic benefits should be just as mobile as everything else is today,” Obama told Congress. “Even if heâs going from job to job, he should still be able to save for retirement and take his savings with him.â
Obama’s proposals would require action by a Republican-controlled CongressÂ in an election year session, but Obama has expressed optimism he can still work with Congress on the issue.
“These items shouldn’t be particularly controversial,” Labor Secretary Tom Perez told reporters Monday. “In fact a lot of these ideas enjoy bipartisan support and have bipartisan roots.” Auto-enrolling employees in a retirement plan, for example, has been proposed for years by both the conservative Heritage Foundation and the center-left Brookings Institution.
Perez said many small businesses worry that the administrative and compliance burdens are too costly for them to offer a retirement planÂ â obstacles that the administration’s proposals try to address.
“What we’reÂ trying to do is recognize those barriers and address them,” he said. “We want to increase access, we want to reduce burdens, but at the same time we want to make sure there are sufficient consumer protections in place.”