The Treasury Department announced on Friday that it will begin to wind down the myRA retirement saving program after what it calls “a thorough review by Treasury that found it not to be cost effective.”
The review was undertaken as part of the Administration’s effort “to assess existing programs and promote a more effective government.”
Announced with great fanfare by President Obama in his 2014 State of the Union address, the Treasury Department developed the framework for the government-sponsored IRA program over the next 10 months, implementing the plan in November 2015.
But only about 20,000 people had signed up for it by the end of 2016, the Treasury Department told CNNMoney in mid-December.
As the network noted, “it’s a paltry number when compared to the roughly 55 million workers who don’t have access to an employer-sponsored retirement plan.”
American taxpayers have paid nearly $70 million to manage the program since 2014.
“The myRA program was created to help low to middle-income earners start saving for retirement,” Jovita Carranza, U.S. Treasurer, said in a statement. “Unfortunately, there has been very little demand for the program, and the cost to taxpayers cannot be justified by the assets in the program.
“Fortunately, ample private sector solutions exist, which resulted in less appeal for myRA,” he added. “We will be phasing out the myRA program over the coming months. We will be communicating frequently with participants to help facilitate a smooth transition to other investment opportunities.”
Participants in the myRA program are being notified of the upcoming changes, including information on moving their myRA savings to another Roth IRA. Participants are encouraged to visit www.myRA.gov for additional information or to call myRA customer support with any questions.
“We are committed to promoting retirement savings, and, as Treasurer, I plan to devote a substantial amount of my time to ensuring more Americans have the tools and know-how to save for retirement,” Carranza concluded.
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
