Obama looking for retirement plan reforms

By Eric Zimmermann
The Hill
September 5, 2009

President Barack Obama announced a series of policy changes Saturday aimed at making it easier for Americans to save money for retirement.

Among the changes are expanded access to 401k plans, small tax policy changes and a pledge to let workers convert vacation days into retirement savings.

The president framed the new policies as a response to the recession.

“I’ve heard from so many who’ve had to put off retirement, or come out of retirement, to make ends meet,” Obama said in his weekly address.

But the president also suggested that the recession should be a wake-up call to structurally change the American economy.

Even before the recession, Obama argued, Americans saved too little and borrowed too much.

“We have to revive this economy and rebuild it stronger than before,” the president urged. “And making sure that folks have the opportunity and incentive to save – for a home or college, for retirement or a rainy day – is essential to that effort.”

As part of the policy shift, the government will enable automatic enrollment in 401k plans for small-business employees, a policy that has previously applied to only larger employers.

“We know that automatic enrollment has made a big difference in participation rates by making it simpler for workers to save,” Obama said, “and that’s why we’re going to expand it to more people.”

Second, a checkbox will be added to tax forms letting Americans receive their tax refund as a savings bond.

A modification in labor policy will allow workers to transfer unused vacation days into their retirements plans.

Finally, the IRS will create a “plain-English” guide to help Americans understand their options for retirement savings.

The president described the new policies as “common-sense changes,” but urged Congress to do more. Specifically, Obama pushed lawmakers to approve his proposal to guarantee all workers have access to retirement accounts through their employers.

Comments are closed.