Trump and the GOP legislature may cut auto-IRA state plans
- Until president-elect Donald Trump is inaugurated and sitting in the Oval Office ready to work, the biggest question in the nation's capitol deals with which Obama administration initiative Trump will target next. According to Investment News, auto-IRA plans may be a potential candidate for the cutting board.
- In August, the Labor Department announced new rules with the goal of encouraging states to adopt payroll-deducted auto-IRAs, another employee-retirement savings option. Designed for employees at small businesses, auto-IRA plans would be exempt from the Employee Retirement Income Security Act of 1974 under certain conditions, which would limit plan liability.
- Financial groups have lobbied against the bill, and some Republicans are ready to try to kill it. Trump, reportedly, favors states setting up auto-IRAs at their discretion.
Critics and proponents of the auto-IRA bill must wait for the outcome. It’s very likely that GOP lawmakers will undo many of Obama administration initiatives, including auto-IRA plans.
Meanwhile companies in states where auto-IRAs have been adopted or proposed might want to become familiar with these accounts to keep compliant with the law.
This news also comes within days of a report that the average 15-year retirement saver is essentially ahead of the game when it comes to reaching their savings goals — a relief for both employers and employees. Going into 2017, it will be crucial for HR departments to establish a strong system with which to communicate benefits offerings and financial literacy basics.