J. Mark Iwry is the quarterback of the Obama administration's retirement policy team, but he'll play offense, defense and for the other side when it comes to his mission: to find new ways to help Americans save.
J. Mark Iwry is the quarterback of the Obama administration's retirement policy team, but he'll play offense, defense and for the other side when it comes to his mission: to find new ways to help Americans save.
Mr. Iwry, senior adviser to Treasury Secretary Timothy Geithner and deputy assistant Treasury secretary for retirement and health policy, has a legislative wish list for next year that includes expanding the existing saver's credit program to provide a 50% match on the first $1,000 of retirement savings made by families earning less than $65,000 a year.
First, though, Mr. Iwry's going to put the clout he has on both sides of the aisle behind a bill that would require employers not offering retirement plans to deposit part of each worker's paycheck in an automatic individual retirement account.
The proposal would give the 75 million workers — about half of the U.S. work force — without an employer-based plan the opportunity to create a nest egg for their retirement.
Although Capitol Hill is focused on other issues, “We hope Congress will enact it in 2010,” Mr. Iwry said.
President Barack Obama's fiscal-2010 budget includes the auto-IRA proposal and seeks as much as $1 billion to establish a federal organization to oversee these plans.
The agency would cost $200 million to start up and would require up to $1 billion in federal support over time, according to the budget.
Even though there is strong support on the Hill, there is opposition. In a March speech at the American Society of Pension Professionals and Actuaries 401(k) Summit, Randy Johnson, vice president for labor and employee benefits at the U.S. Chamber of Commerce, said that it would create too much of a burden on small businesses.
Given that the proposal merely would require employers to deduct a portion of a worker's pay and deposit it into his or her IRA, and that no contribution would be mandated, it wouldn't be onerous, Mr. Iwry said.
“Employers shouldn't find this any more difficult than the direct deposit of a paycheck,” he said. And even for employers that don't use direct deposit, this is similar to adding another payroll deduction of the sort employers make with tax withholdings, he said.
Mr. Iwry hopes the proposal will encourage more employers to start 401(k) plans.
“We don't expect half of the employers that have auto IRAs would immediately step up to a 401(k), but even if one out of 10 did, that would be a great increase in 401(k) formation, and that would be our top preference.”
