An article on the Automatic IRA in the July 13 edition of the Capitol Hill newspaper The Hill (“Democrats and AARP want to make IRA enrollment automatic”) left out several crucial parts of the story.
First and foremost, the Automatic IRA has enjoyed wide bipartisan and cross-ideological support since it was first unveiled at The Heritage Foundation in February 2006. This is not, as the story implied, some partisan initiative. It was co-developed by Mark Iwry, then at Brookings, and me as part of the Retirement Security Project. It was endorsed by both the McCain and Obama campaigns during the 2008 campaign. This broad support continues.
The Automatic IRA is designed to provide a simple, low-cost way for American workers who don’t have access to a 401(k)-type plan to save for retirement. By combining the automatic enrollment technique that has been adopted by most larger 401(k) plans with the IRA that workers have known for decades, we hope to enable new savers to build retirement security while giving older savers who may have had a 401(k) at another employer the ability to continue to increase their savings.
Studies show that small business employees want the Automatic IRA, and as they learn more about the proposal, employers do also. In past Congresses, the proposal had bipartisan co-sponsorship, and that level of support is possible this year also. In addition to the AARP’s support, the Automatic IRA has also been endorsed by a number of small business groups, including the U.S. Women’s Chamber of Commerce, the National Alliance of African-American Chambers of Commerce, Women Impacting Public Policy, and the Business and Professional Women’s Foundation.
In short, the Automatic IRA is not part of a narrow partisan agenda, as The Hill’s flawed article implied. Rather, it is a broad–based, cross-ideological effort to improve Americans’ retirement security.