President Obama’s budget may contain “unintentional harmful consequences” regarding efforts to increase retirement savings, says the Profit Sharing/401(k) Council of America (PSCA).
The PSCA says while two provisions are commendable (the modifications to the Saver’s Credit and the reform of asset tests for means-tested public benefit programs), two provisions are problematic.
First, the budget appears to require that all employer-provided 401(k)-type plans offer automatic enrollment of all eligible employees. PSCA says it’s “wary” of mandating a specific retirement plan design, and that part of the success of the defined contribution system is the flexibility to design and offer a plan that fits the needs of a particular workforce or business.
“While Washington favors a one-size-fits-all approach, this new mandate is sure to create a myriad of unintentional consequences,” says PSCA President David Wray.