Set aside for a moment the fight in Washington, D.C., over stopgap spending legislation. In his budget blueprint for 2014, President Obama has proposed a number of tax and other reforms that would mean big changes in how retirement is financed.
What Congress does over the next couple of days could either avoid or trigger a government shutdown. Either way, at some point after the crisis is resolved, the House and Senate are likely take up the following proposals, all of which would have lasting effects on anyone saving for retirement.
Automatic enrollment in IRAs
The president’s 2014 budget would require employers in business for at least two years that have more than 10 employees to offer an automatic IRA option to employees.Contributions would be made to an IRA on a payroll-deduction basis. If an employer already offers a plan, it wouldn’t have to comply with this regulation, but if its current plan excludes certain segments of its employees from participating in the plan, the employer would have to begin to offer the automatic IRA to those excluded employees, according to an assessment by KPMG.
Obama included this provision in the 2014 budget because he wanted to turn the tide on a rising retirement crisis in the United States. According to a Treasury report, the number of U.S. workers participating in an employer-sponsored retirement plan has remained stagnant for decades at no more than about half the total workforce.
Read More: Obama's budget calls for big changes to 401(k)s, IRAs | BenefitsPro
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