Auto-IRA Architects Size Up Landscape
Three key players in the formulation and design of the auto-IRA concept came together at a Sept. 17 policy forum in Washington, D.C. to offer perspective and an assessment of the road ahead.
Two of the panelists at the 2014 Assets Learning Conference, held by the non-profit Corporation for Enterprise Development —
, a senior advisor to the Secretary of the Treasury; and David John
, now a strategic policy advisor for AARP — were the original architects of the auto-IRA concept, authoring a paper
in 2006 for the Retirement Security Project which recognized the power of payroll deduction savings and highlighted that it was access, not effectiveness, of the current retirement system that required a new approach.
The third panelist, Illinois State Senator Daniel Biss
(D-Evanston), is sponsor of the Illinois Secure Choice Savings Program Act (SB 2758
), one of a number of state-sponsored retirement savings account proposals under consideration across the nation.
The initial expectation from Iwry, John and other like-minded advocates was to implement this policy at the federal level, but entrenched opposition from certain financial services and small business interests, as well as partisan political gridlock in the nation’s capital, caused that effort to founder.
In recent years, the pro-auto-IRA forces have tried a different tack. Now, with federal action on this issue viewed as a near impossibility, these forces are focused instead on enacting the automatic payroll deduction IRA at the state level. California was the first state to act, passing a bill in the fall of 2012 that establishes a framework for an auto-IRA program to be implemented. Connecticut followed suit, approving similar legislation in the spring of this year. Other states, including Oregon and Maryland, are still evaluating their options.
Illinois may be about to vault ahead in that queue of state actors. Sen. Biss said he was optimistic that the Illinois House of Representatives will clear his bill in a special session after the November elections (the bill already passed the Illinois Senate last spring), where the sponsor of the bill is House Majority Leader Barbara Flynn Currie
(D-Chicago), the second highest ranking member of the majority caucus.
Should that happen, Illinois will become the first state in the nation to require private businesses that have more than 25 employees have been in operation for at least two years to offer a retirement savings arrangement for their employees.
Andrew Remo is ASPPA’s Congressional Affairs Manager.