The Investment Company Institute, a Washington-based trade group for the mutual-fund industry, welcomed the proposal as a complement to “existing vibrant and competitive private-sector retirement offerings,” according to a statement.
Linda Wolohan, a spokeswoman for Vanguard Group Inc., said in an e-mail yesterday that “although we don’t have the details yet, Vanguard is generally supportive of expanding savings opportunities for those not covered by a workplace retirement plan.”
Wolohan declined to comment further before hearing the details of Obama’s proposal. Vanguard was the second-largest manager of 401(k)-type assets in 2012 behind Fidelity Investments, according to researcher Cerulli Associates.
Fidelity, which is also the largest provider of IRAs, declined to comment before hearing the speech, according to an e-mail from spokeswoman Eileen O’Connor.
JPMorgan Chase & Co., which manages retirement assets and administers plans, declined to comment before seeing more details, Gregory Roth, a bank spokesman, said in an e-mail.
One of the biggest challenges for the retirement system is that many workers don’t have access to a pension or 401(k) plan through their employer, said Lisa Mensah, executive director of the initiative on financial security at the Aspen Institute.
Small Businesses
“We have to get people in,” Mensah said. “You do need an automated way for people to get into the savings system.”
Small-business groups in the past have opposed such proposals because they say that setting up the required payroll deduction would be a cost for them.
Molly Brogan Day, a spokeswoman for the National Small Business Association in Washington, said that while her group “supports making retirement savings easier, the auto-IRA idea is one we’ve raised skepticism over in the past because it put the administrative and financial onus squarely on small firms.”