Obama encourages statewide retirement plans

President Barack Obama has directed the Department of Labor to propose rules by the end of the year that “provide a clear path forward for states to create retirement savings programs,” he said Monday at the White House Conference on Aging. The rules would ease any worries by state lawmakers that state-based retirement plans would run afoul of federal retirement law. Washington and Illinois have approved state-run automatic savings programs for companies that don't offer their own retirement plans to employees. About 20 more states are considering similar measures, Mr. Obama said. “We want to do everything we can to encourage more states to take this step,” Mr. Obama said. “And if every state did this, tens of millions more Americans could save for retirement at work.” The Financial Services Institute and other industry groups have opposed private-sector state retirement plans, arguing that they cut into financial advisers' turf. But Mr. Obama said they would help build the retirement savings of employees who currently don't have that option at work. “Even if your employer doesn't provide those mechanisms, you still have a way of accessing it,” he said. “Every dollar you put in, that's going to be a dollar that also then benefits from the same kinds of tax advantages that somebody with a million dollars is able to take advantage of all the time.”