Washington Perspective, August 5, 2005
August 5, 2005
As Congress heads into its August recess, retirement issues remain at the top of the legislative agenda. Yet, much remains unclear about the ultimate shape of legislative change, if any, on issues as diverse as Social Security reform and incentives to improve the rate of retirement savings. In fact, the resolution of the former may be critical to any action on the latter.
In the August 5, 2005 edition
Issue Spotlight
- Resolving Social Security Impasse May Hold Key to Retirement Legislation
- GROW Legislation Introduced
- AmeriSave Proposal Announced
Issue Updates
Issue Spotlight
Resolving Social Security Impasse May Hold Key to Retirement Legislation
Much remains unclear about the ultimate shape of legislative change, if any, on issues as diverse as Social Security reform and incentives to improve the rate of retirement savings. In fact, the resolution of the former may be critical to any action on the latter.
GROW Legislation Introduced
Republicans introduced the Growing Real Ownership for Workers Act of 2005 (GROW), which would create individual investment accounts from Social Security’s annual surpluses. The plan would provide a mechanism for paying for private accounts for Social Security, but does not address the issue of meeting the long-term funding requirements of the program.
AmeriSave Proposal Announced
Just before the August recess, House Democrats introduced their own retirement reform proposal called AmeriSave which would provide “middle and working-class families” with a government match of $1 for every $1, up to $1,000, invested in a 401(k) plan or IRA.
Issue Updates
Financial Advice Proposals Move Forward
Both Democrats and Republicans appear to agree about the importance of providing incentives and protections for employers who offer their employees financial advice from a qualified investment advisor. Prospects for the advice provisions will rely on how Congress decides to move on pension reform, Social Security reform and retirement savings initiatives following the August recess.
Retirement Reform May Affect 457 Plans
When Congress returns in September, there is likely to be considerable discussion and perhaps action on retirement legislation. Supporters of public sector retirement saving legislation, including ICMA-RC, are carefully watching the progress of any legislation to fight off any proposed changes that would adversely affect public sector employees.
From the Archive
From the June 6 edition: Automatic Enrollment Briefing Paper
While not a new idea, the concept of automatic enrollment of new hires into an employer’s retirement plan has gained considerably more attention in recent months. It has emerged as one of several enhancements to retirement programs that may be included in connection with any eventual Social Security reform legislation.