State legislators from around the country were urged Friday to enact auto IRA enrollment to trim safety net costs and to keep millions of the elderly from falling into poverty.
That message was stressed by Treasury Department retirement policy chief Mark Iwry at a seminar hosted by the National Conference of State Legislators in Washington D.C.
Iwry said a chief appeal of auto IRA enrollment for the states is it will propel more workers to start saving earlier, which will lead to less need for government assistance programs later on.
He said only a very few number of small business workers should individually opt out of the plans: people in dire straits and job-holders with low incomes.
States should use the programs as platforms for financial education, he added.
The Secure Choice Retirement Savings Program, which Iwry helped create in California and which was signed into law in September, will keep seven million seniors from sinking into poverty, California State Senate President pro Tempore Kevin de Leon (D-Los Angeles) told the gathering.=
“It is their pathway to self-sufficiency when they can no longer work,” said de Leon.
By mandating workers (who can opt-out) put 3 at least percent of their paychecks into IRAs filled with low-risk Treasury bonds, de Leon said Secure Choice will see millenials become a new generation of savers.
Keying in on the ability of the program to save taxpayers money and having seniors rely less on government aid, he said Secure Choice is about personal responsibility.
American Council of Life Insurers lobbyist Alane Dent said the devil could be in the details for the state offerings.