(Archived Content)
FROM THE OFFICE OF PUBLIC AFFAIRS
LS-786We must encourage individuals to increase their retirement savings. Our national economic health and the financial security of our nation's workers during retirement depend on it.
Individuals are much more likely to save when saving is made easy. That is one reason why employer-sponsored retirement savings plans have become America's most popular savings vehicles. Unfortunately, despite the popularity of these plans, participation in them is still far lower than it should be. We need to find ways to broaden participation.
Private sector experience and academic studies have shown that automatic enrollment is one way to achieve broader participation in savings plans. When employers automatically enroll workers in retirement savings plans participation improves dramatically, especially among low-and moderate-income workers.
Treasury announced today that the IRS is taking several steps related to automatic enrollment, all of which should promote broader participation in employer-sponsored retirement plans.
We see automatic enrollment as a promising method of encouraging participation by those who have disproportionately been missing the benefits of a regular, disciplined approach to retirement saving. Automatic enrollment is fully consistent with Labor and Treasury policies, and we encourage employers to consider adopting automatic enrollment.
By encouraging saving we can fairly and effectively raise the personal savings rate and increase the retirement security of all Americans.