The automatic IRA, as proposed in President Obama’s 2010 government budget, would require most employers that don’t already offer a retirement plan to enroll their workers in a direct-deposit IRA. A new Hart Research Associates and AARP survey found that 79 percent of adults are in favor of requiring employers with 10 or more workers that have been in business at least two years to offer a retirement plan. Employees would be automatically enrolled, but also given an opportunity to opt out.
Support for the automatic IRA idea was surprisingly similar across partisan and socioeconomic lines. Both Democrats (84 percent) and Republicans (76 percent) favor the automatic IRA, as do younger workers between the ages of 25 and 34 (84 percent) and seniors (73 percent). Households with incomes under $40,000 (80 percent) were equally as likely as families bringing in over $75,000 annually (82 percent) to find a retirement account mandate helpful.
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Employees were especially eager to have one account that would stay with them when they changed jobs (77 percent) and were also largely favorable to the idea of automatically investing 3 percent of a worker’s pay into the account unless the employee opted out (62 percent). Most workers also like the idea of a government match for households that earn $65,000 annually or less. Some 65 percent of Americans support expanding the savers tax credit to refund up to $500 in federal taxes to match what workers save for themselves.
The AARP survey also found that Americans almost universally desire increased transparency from financial institutions including requiring companies managing 401(k) plans to clearly explain the fees charged (95 percent) and investment companies to fully disclose the costs, risks, and benefits of financial products (95 percent). And 93 percent of the survey respondents would like additional opportunities to check up on their investment adviser's past violations or professional misconduct.
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