[Congressional Record (Bound Edition), Volume 158 (2012), Part 2]
[House]
[Page 1919]
[From the U.S. Government Publishing Office, www.gpo.gov]




                AUTOMATIC INDIVIDUAL RETIREMENT ACCOUNT

  The SPEAKER pro tempore. The Chair recognizes the gentleman from 
Massachusetts (Mr. Neal) for 5 minutes.
  Mr. NEAL. Mr. Speaker, I rise today to talk about a piece of 
legislation that I'm introducing later on in the afternoon, the 
Automatic Individual Retirement Account Act of 2012.
  According to Boston College's Center for Retirement Research, the 
United States has a retirement income deficit of $6.6 trillion. This is 
the gap between what Americans need for retirement and the amount that 
they've actually saved. This amounts to more than $90,000 per 
household. This is a staggering number and demonstrates that we, as 
Americans, need to do more to prepare for a financially secure 
retirement. One area that I think we need to focus on is getting more 
low- and middle-income workers into a retirement savings plan, and the 
auto IRA would do just that.
  It is estimated that 75 million Americans--half the American people 
who get up and go to work every day--are not in an employer-provided 
retirement plan or other opportunity to save through workplace 
contributions. The Auto IRA Act offers a commonsense solution to 
dramatically expand retirement savings in the U.S. Under this proposal, 
tens of millions of workers would be eligible to save for retirement 
through a payroll deduction. And it has been estimated that the auto 
IRA proposal could raise net national savings by nearly $8 billion 
annually.
  This legislation would create automatic payroll deposit individual 
retirement accounts, or auto IRAs, for workers who do not have access 
to employer-provided qualified retirement plans. The bill would require 
employers to automatically enroll employees in the auto IRA unless the 
employee opts out. These are ``set it and forget it'' payroll deposit 
accounts.
  I am sensitive to the increased burden on small businesses, so the 
bill provides for a tax credit for employers with less than 100 
employees in order to offset the administrative costs of establishing 
this initiative. Furthermore, only employers with at least 10 
employees, who have been in business for at least 2 years, would be 
covered by the bill. And the bill does not mandate any matching 
contributions by employers or other fiduciary responsibilities for the 
management of the accounts.
  It's my hope that once employers start participating in the auto IRA 
program, they will decide to convert these arrangements to the broader 
401(k) plans. The IRA contribution limits are lower than the 401(k) 
limits, so business owners may see incentives to switch to bigger 
plans. And we've also enhanced the small employer pension plan startup 
credit, so if an auto IRA employer switches from auto IRA to 401(k) 
plans, they would get the credit for 3 years instead of 2.

                              {time}  1020

  Listen to this, this proposal was jointly developed working with me 
through the Brookings Institution and the Heritage Foundation. It has 
garnered widespread support, including AARP, the United States Black 
Chamber of Commerce, the Women's Institute For a Secure Retirement, and 
the Aspen Institute Initiative on Financial Security. You should join 
in supporting this legislation.
  I am also highlighting another retirement plan bill that I'm 
introducing today, the Retirement Plan Simplification and Enhancement 
Act. Our current retirement plan rules are very complicated. This bill 
includes a number of commonsense reforms that will simplify the rules 
while we still protect participants.
  Under current law, small businesses that adopt a new retirement plan 
are eligible for a tax credit to cover some of their startup costs. We 
are tripling the credit to $1,500 to cover all of these expenses. I 
hope this will encourage more small employers to sponsor retirement 
plans.
  Currently, employers can exclude some part-time workers from 
participating in their 401(k) plans. As women are more likely to work 
part-time than men, these rules can be quite harmful to them. So my 
bill would require employers to allow certain long-term, part-time 
employees to make elective deferrals to their 401(k) plans.
  Both of these bills are commonsense reforms that will help Americans 
prepare for a good and financially secure retirement. I hope you will 
join on to the Automatic IRA Act of 2012 and the Retirement Plan 
Simplification and Enhancement Act.

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