Could Employer Retirement Plan Requirement Boost Savings?

By Kristen Ricaurte Knebel

June 9 — Establishing a nationwide minimum-coverage requirement for retirement plans could be a path forward to helping Americans save adequately for retirement, according to new recommendations from the Bipartisan Policy Center.

Such a mandate would require companies with 50 or more employees not offering retirement plans to automatically enroll workers into a retirement account, according to “ Securing Our Financial Future: Report of the Commission on Retirement Security and Personal Savings ,” released June 9. The commission set out to address issues with retirement savings, including the lack of employer-sponsored retirement plans and retirement plan leakage.

“Currently, about half the people in the country don’t participate in a retirement plan at work,” former Sen. Kent Conrad (D-N.D.), co-chairman of the center commission that produced the report, said during a June 9 media briefing.

The proposed minimum-coverage requirement would only be imposed after the establishment of a new kind of retirement plan called a Retirement Security Plan.

These plans would focus on small employers that are reluctant to offer retirement plans now, the report said. These new plans would waive the requirement that employers face when they band together to form multiple employer plans that they be closely related businesses, it said. The new plans also would transfer the administrative and fiduciary responsibilities of running a plan to a third party that would be certified through a process that would be overseen by the Treasury and Labor departments, the report said.

On top of the employer-provided retirement plan proposals, the report also has suggestions to keep Social Security solvent and encourage workers to start saving at a younger age.

Recurring Themes

Many of the recommendations in the report echo other suggestions to boost retirement security that have surfaced over the years, but with no uniform proposals or ideas to gather around, nothing has coalesced.

President Barack Obama introduced a proposal several times that would require every employer with more than 10 employees that doesn't offer a retirement plan to automatically enroll their workers in an individual retirement account. In his fiscal year 2017 budget blueprint, he expanded his retirement proposals by trying to make it easier for unrelated employers to join together to form pooled 401(k)s without running afoul of the Employee Retirement Income Security Act.

Former Sen. Tom Harkin (D-Iowa) introduced legislation before he left office aiming to provide all workers with access to a retirement plan and several bipartisan congressional proposals have been introduced to make it easier for employers to join multiple employer plans.

States have also gotten in on the act, attempting to tackle the lack of employer-sponsored coverage with a variety of proposals, including auto-enrollment IRA programs.

Conrad said he thinks Congress could act on most if not all of the proposals contained in the report on a bipartisan basis, but the reality of the election year crept into his optimism, suggesting that maybe a new president and a new Congress in January will help move these proposals along.

To contact the reporter on this story: Kristen Ricaurte Knebel in Washington at

To contact the editor responsible for this story: Jo-el J. Meyer at