As Congress gears up to starts its fall session, Putnam Investments is wasting little time in pressing lawmakers to pass auto-IRA legislation.
Two bills that were introduced before Congress broke for its summer recess--H.R. 6099, the Automatic IRA Act of 2010, introduced by Richard Neal (D-Massachusetts) and S. 3760, the Automatic IRA Act of 2010, introduced by Jeff Bingaman (D-New Mexico) and co-sponsored by John Kerry (D-Massachusetts) --both require that companies with more than 10 workers automatically enroll their employees in a payroll-deduction IRA (known as auto-IRAs) if they are not already covered by an employer-sponsored retirement plan. Putnam says instituting an auto-IRA law would extend retirement savings coverage to the nearly half of all American workers who have no retirement savings plans through their jobs today.
The Obama administration has called on Congress to enact an automatic IRA measure, and included a proposal in its FY 2011 budget.
Robert Reynolds, president and CEO of Putnam, said Tuesday, September 7, that action was needed soon. "The stakes are high--and rising--for our country. Americans do want to save more, but have found it difficult to do so in this economy. Millions of people face a serious retirement income gap," Reynolds said in a statement. "We believe the single most effective way to close this gap is to automatically enroll workers in simple, low-cost retirement plans. By passing auto-IRA legislation, Congress could directly lift our national savings rate and help millions more workers achieve greater retirement security. It is the right thing to do."