Democrats in the House and Senate have introduced a bill, the Portable Retirement and Investment Account (PRIA) Act, that would automatically establish a retirement account for every American at birth, providing a portable retirement and investment account (PRIA) at the same time the person is issued a Social Security number.
The accounts would be managed by an independent board appointed by the Treasury, the Pension Benefit Guaranty Corp. and other agencies. Account holders would have the option of choosing their own investment options within the PRIA.
Employers would also be entitled to contribute to the account holder’s PRIA if (1) the employer does not offer a retirement plan option, (2) the individual account holder works through mobile platforms or (3) the individual is not entitled to participate in the employer’s retirement account.
We asked two professors and authors of ALM’s Tax Facts with opposing political viewpoints to share their opinions about the PRIA proposal.
Below is a summary of the debate that ensued between the two professors.
Bloink: The current retirement savings account system isn’t working for all taxpayers. Americans are more likely than ever to change jobs frequently and work independently in the modern “gig” economy. Traditional 401(k)s simply don’t cut it for these taxpayers — and we shouldn’t expect to return to the “old” workplace model anytime soon. It’s time that our retirement savings system evolved along with our evolving workspaces.
Byrnes: Every American has the opportunity to open an IRA even if their employer doesn’t offer a retirement savings option. Creating an entirely new form of retirement accounts would add to a system that’s already much too complicated for many Americans to navigate. While every individual would automatically be eligible for these accounts at birth, eligibility would change over time — creating yet another complication that could actually act as a barrier to savings.