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Regulation and Compliance > Legislation

Auto-IRA Bill Up for Vote This Week

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What You Need to Know

  • House Ways and Means will hold a markup and likely vote on Neal's auto-IRA bill.
  • Other measures to be considered this week include expanding Medicare coverage to include dental, vision and hearing benefits.
  • Neal's bill requires employers without employer-sponsored retirement plans to automatically enroll their employees in IRAs or 401(k)-type plans.

House Ways and Means Committee Chairman Richard Neal, D-Mass., said Tuesday that his committee will consider on Thursday and Friday his auto-IRA bill as well as making the Saver’s Credit refundable — legislative proposals under the budget reconciliation instructions.

Neal’s bill requires employers without employer-sponsored retirement plans to automatically enroll their employees in IRAs or 401(k)-type plans.

A spokesperson for Neal’s office told ThinkAdvisor Tuesday in an email that there have been some refinements to Neal’s auto-IRA plan. “For example, in this version, the auto IRA is the floor but employers also may satisfy the requirements of the proposal with an auto 401(k),” the spokesperson said.

The Saver’s Credit would be refundable under Neal’s plan so that those without any income tax liability would be eligible to receive the benefit in the form of a contribution to their retirement account.

“This grueling pandemic continues to deliver one-two punches in the form of the public health and economic crises, and the American people are counting on us to build back better,” Neal said Tuesday in a statement. “Later this week, the Ways and Means Committee will put an end to the idea that only some workers are worthy of ‘perks’ like paid leave, child care, and assistance in saving for retirement, and finally commit to investments that make these supports fixtures of the American workplace.”

Other measures to be considered by Neal’s committee this week include expanding Medicare coverage to include dental, vision and hearing benefits, and funding elder justice programs that increase support for state and local Adult Protective Services offices and long-term care ombudsman programs to better prevent elder abuse, neglect and exploitation.

Neal said in mid-April that the auto-IRA and refundable savers credit legislation were on his short list of legislative priorities.

“We’ve made tremendous progress in improving our retirement system with the Secure Act and we’ll continue to do so with Secure 2.0,” Neal said. “However, the reality is, about 50% of American workers work for an employer that does not offer a retirement plan at work. To make a significant dent in this coverage gap, it is critical that we enact legislation that requires employers that don’t currently offer a retirement plan to, at minimum, provide for their employees with an auto-IRA option.”

Neal continued: “If you couple IRA legislation with what I’ve also championed over the last few years, to make the savers credit refundable, the results are remarkable.”

Pictured: Rep. Richard Neal (Photo: Stefani Reynolds/Bloomberg)