Over 20 companies and trade associations are expressing support for a new bill that would expand coverage for employees, gig workers, and independent contractors nationwide while preserving private sector retirement plans.
In a letter to Ranking Member Richard Neal, organizations including the American Retirement Association (ARA), Insured Retirement Institute (IRI), and Transamerica voiced their backing of the Automatic IRA Act of 2024, adding that the proposed legislation “represents a meaningful step forward in strengthening and enhancing our nation’s retirement security.”
The bill, introduced by Ranking Member Neal earlier this month, would require employers with more than 10 employees who do not sponsor a retirement plan to automatically enroll their employees in individual retirement accounts (IRAs) or other automatic contribution plans or arrangements, like 401(k) plans.
Under the proposed legislation, small business employers who offer a state or national automatic IRA would also be eligible for a tax credit of $500 per year for three years, among other existing tax credits.
Companies and associations also touted the bill for allowing companies and employees to take advantage of annuity options. For employees with at least a $200,000 vested retirement account balance, the legislation would require employers to offer distributions of up to 50% of savings to purchase a lifetime income solution.
In the letter, organizations applauded the bill for supporting a public and private retirement system. A fact sheet previously released by the Ways & Means Committee Democrats stated that while the bill would expand coverage for 1099 workers, it would also “build upon, expand, and improve the private pension system in a manner that explicitly protects and complements employer-sponsored plans and arrangements.”
“Your bill will establish a national framework that would ensure broader coverage and enhanced benefits for small business workers while at the same time preserving the possibility of private sector innovation and flexibility to adjust to the changing needs of tomorrow’s workers” organizations wrote. “The bill will also provide more opportunities for employers to utilize new tools provided to them in the SECURE Act and the SECURE 2.0 Act, such as pooled employer plans, starter 401(k) plans, and enhanced tax credits to expand opportunities for more workers to save during their working years.”
Other organizations included in the letter are the American Council of Life Insurers, Ascensus, Cetera, Empower, Equitable, Finseca, Jackson National Life, John Hancock, National Association for Fixed Annuities, Nationwide, Northern Trust Asset Management, Pacific Life, Prudential, Sammons Financial Group, Thrivent, TIAA, Voya Financial, Women’s Institute for a Secure Retirement, and the Council of Life Insurers Retirement Association.
SEE ALSO:
- ‘Automatic IRA Act of 2024’ Enthusiastically Welcomed by Retirement Industry
- New Michigan Bill Would Create State Auto IRA
- State Auto-IRA Assets Pass $1 Billion Milestone