Required Federal Retirement Plan Backed by the American Council of Life Insurers

The auto-enrollment of federal employees into a retirement savings program is being backed by the American Council of Life Insurers or ACLI.

The return of the Automatic Retirement Plan Act is being endorsed by the ACLI.

The bill, introduced by the chairman of the House Ways and Means Committee, Richard Neal, D-Mass, was proposed version at the last meeting of Congress.

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Neal is expected to introduce the actual bill at some point this year.

Previously, the bill (H.R. 4523) made it mandatory for most employers to set up automatic contributions towards all employee retirement plans, which the employees would then have to choose to opt out from.

If an employer fails to set up these automatic contributions, the bill proposed that a tax be excised against them, the flip side being that were said employers compliant, they’d receive a tax credit instead.

The Insured Retirement Institute is among those organizations listed in favor of H.R. 4523.

Thirty million more people should have access to retirement funds under Neal’s new bill, according to the ACLI, with the number of those saving for retirement at about 22 million people.

The approach is a bold one, according to the President of the ACLI, Susan Neely, but a necessary one to prevent a retirement crisis and to close the retirement savings gap. “People are living longer without adequate retirement savings and increasing access to workplace plans can be a powerful solution,” Neely says. H.R. 4523 is built to make it more simple for employers to offer their workers retirement plans.

And while workers do have the option of not participating, Neely claims that 80 percent of the people who have the option to contribute to an employer-offered retirement plan usually do.

And according to Neely, this endorsement is not a cavalier decision that the ACLI has made. There is a crisis on the horizon, and new ideas might be what is needed to solve them. Automatically enrolling workers in a retirement plan may be just what is needed.

“It is a market-based solution that can help more people save more of their own money for the good of their families’ futures,” Neely said. “Family financial security is the ultimate peace of mind.”