The board of the American Council of Life Insurers voted Monday to support legislation that would require the vast majority of employers to offer a retirement plan in a major policy shift from previous industry support for voluntary participation.
The legislation, which is the former H.R. 4523, the Automatic Retirement Plan Act of 2017, introduced by House Ways and Means Committee Chairman Richard Neal, D-Mass., would increase the number of people with access to retirement plans by at least 22 million, according to the ACLI.
Neal’s bill did not pass in the last Congress when Democrats were in the minority. However, a spokeswoman for Neal told ThinkAdvisor on Tuesday that the legislation is in the pipeline and still a priority, but the committee doesn’t yet have a specific date for when it will be reintroduced.
Neal is working on getting bipartisan support now for the legislation, the spokeswoman noted.
“Newer, bolder thinking is sorely needed to help millions of Americans still struggling to prepare for long retirements,” the ACLI said in a statement explaining its endorsement of a retirement plan requirement.
The legislation as previously written would make all but the smallest businesses offer a retirement plan, although workers would have a chance to opt out.
It would exclude employers with 10 or fewer employees working a typical business day.
ACLI President & CEO Susan Neely stated in the release that the impetus for ACLI’s support is that “too many workers are nearing retirement without enough savings, and workplace plans have proven to be a key factor in developing the savings habit.” According to Neely’s statement, four out of five full-time private-sector employees participate in a retirement plan when it is offered.
If legislation passes as envisioned, the requirement to offer a plan would be enforced with a tax.