Senator Tom Harkin of Iowa proposed a new private pension plan, called the USA Retirement Fund, in which businesses would be required to automatically enroll their employees unless the business already had an established company retirement plan. Employers would only have to manage payroll deductions, but could contribute up to $5,000 for each employee annually. Employees could voluntarily contribute up to 6% of their annual pay up to a maximum of $10,000 and qualify for a “refundable savers credit” of up to $2,000 annually. The pension account would have spousal protections and survivor benefits. Harkin says his plan would complement President Obama’s MyRA.
As we said yesterday in regards to President Obama’s MyRA proposal, we appreciate that politicians are finally engaging in a very important matter and we would love for Americans to have more retirement savings options, but if people aren’t making enough money to get by or are unemployed, they’re not going to be able to contribute to these plans no matter how creative they are.
We believe Washington’s time would be better spent focusing on job growth, stagnant wages and our convoluted tax system. Let’s get the over 6,000,000 people who are unemployed, underemployed or dropped out of the labor force working again for real wages.