As Congress gears up to start 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.
Recent research by Allianz Life Insurance Company of North America says that despite the current financial turmoil, the global retirement market is expected to grow by 66% by 2020, an annual growth rate of 4.7%. The data, released by Allianz Demographic Pulse, also states that total pension assets during this time period will increase from $28 trillion to $46 trillion. The United States is the leading retirement market in the world, the Demographic Pulse states, covering slightly more than half of the world’s total retirement assets of nearly $28 trillion in 2009. The United Kingdom followed the United States with 11.5% of the global retirement market, while Western Europe’s combined retirement assets came to slightly more than 20%. Australia and Japan each had 3% of the global market, while the emerging economies of Asia and Central and Eastern Europe, which are still in the early stages of building up their individual funded pension systems, represented currently only minor shares (1.8% and 0.4%, respectively).