Campaign Promises

Departments -> Labor -> Retirement

LA-27 The Promise: "...will automatically enroll workers in a workplace pension plan."
When/Where: Obama and Biden's Plan for America: "Blueprint for Change," dated 10/09/08.
Status:The thrust of this promise wasn't anything new or innovative. The Pension Protection Act of 2006 encouraged automatic 401(k) enrollment. While bigger businesses offer 401(k) participation, it isn't really common for smaller businesses to offer this savings/investment capability.

President Obama addressed this promise in his FY2010 budget proposal (Table S-6). Under this proposal, employees would be automatically enrolled in workplace pension plans and would be allowed to opt out if they chose.

On 07/07/09, the Treasury Department issued final regulations on two automatic enrollment alternatives: (1) the Qualified Automatic Contribution Arrangement (QACA) and (2) the Eligible Automatic Contribution Arrangement (EACA). Under the QACA, escalating salary deferrals coupled with an employer contribution that vests after two years are authorized. Under the EACA, salary deferrals with or without employer contributions are authorized and distribution of automatic deferrals is permitted within 90 days after the first such deferral if an employee opts out of the program within that time frame.

The Departments of Labor (DOL) and Treasury announced in 02/10 that they were seeking to bring employer-sponsored 401(k) and Individual Retirement Accounts (IRAs) under structures created and administered by the U.S. Government, dubbed Guaranteed Retirement Accounts (GRAs). Republicans expressed strong opposition to federalize private sector 401(k) and IRAs and public comments were largely negative, expressing distrust over the government's ability to manage retirement accounts.

President Obama devoted an entire paragraph in his FY2011 budget proposal on this topic, wherein it states: "The Administration will streamline the process for 401(k) plans to adopt automatic enrollment." In reality, by 05/15, DOL Bureau of Labor Statistics data indicates that only 51% of the U.S. workforce was participating in a direct contribution (DC) plan such as 401(K) or IRA.

In 11/15, the Department of Treasury launched a new savings bond program called "MyRA" to encourage employees without a workplace 401(K) or IRA plan to build a safe, no-cost savings account with a reasonable, no-risk return on investment. By end-CY2016, only 20,000 people had signed up for the "MyRA" program, leaving an estimated 55M employees without a mandated, automatic 401(K) or IRA participation program.

This promise was not fulfilled.
LA-28 The Promise: "Create a retirement savings tax credit for low incomes."
When/Where: Interview with Tax Policy Center of Urban and Brookings Institutions dated 08/15/08.
Status:Source is cited for confirmation of exact promise wording only, as it existed before original "When/Where" campaign document was deleted from archival websites.

Conceptually, this tax credit has been in effect since its inception in 2001. For the 2009 tax year, singles with incomes up to $26,500, married couples with incomes up to $53,000, and heads of household with incomes up to $39,750 could claim the Retirement Savings Contributions Credit, commonly known as the "Savers Credit".

If eligible contributions are made to a qualified IRA, 401(k) or other qualified retirement plans, credits can be granted up to $1,000 (singles) or up to $2,000 (married filing jointly).

Nonetheless, President Obama's FY2010 budget proposal included modification of the existing Savers Credit to provide a 50% match on the first $1,000 of retirement savings for couples that earned less than $65,000 ($32,500 for singles). This amount was raised to $85,000 for couples in President Obama's FY2011 budget proposal. This credit would have been fully refundable.

However, Congress did not support the above initiatives. With the passage of time, the retirement savings tax credit for low incomes was dropped from President Obama's agenda.

This promise was not fulfilled.
LA-29 The Promise: "... employers who do not currently offer a retirement plan will be required to enroll their employees in a direct-deposit [automatic] IRA account..."
When/Where: Obama and Biden's Plan for America: "Blueprint for Change," dated 10/09/08.
Status:This promise was reflected in President Obama's FY2010 Budget Plan (Table S-6). Employers who did not offer a retirement plan would be required to enroll their employees in a direct-deposit IRA account that is compatible with existing direct-deposit payroll systems.

President Obama went further in his FY2011 budget proposal. In a section entitled "Establishing Automatic Workplace Pensions," he stated: "...employers who do not currently offer a retirement plan will be required to enroll their employees in a direct-deposit IRA account that is compatible with existing direct-deposit payroll systems. Employees may opt-out if they choose. The smallest firms would be exempt." This proposal got nowhere.

On 08/05/10, Senator Jeff Bingaman (D-NM) introduced the "Automatic IRA Act of 2010" (S. 3760). This bill expired without action at the end of the 111th Congress. Senator Bingaman tried again on 09/14/11 by introducing the "Automatic IRA Act of 2011" (S. 1557). Likewise, Congressman Richard Neal (D-MA) introduced the "Automatic IRA Act of 2012" (H.R. 4049) on 02/16/12. Both of these bills expired without action at the end of the 112th Congress. Senator Sheldon Whitehouse (D-RI) introduced the "Automatic IRA Act of 2015" (S.245) on 01/22/15. This bill expired without action at the end of the 114th Congress at end-CY2016.

This promise was not fulfilled.
LA-30 The Promise: "...will ensure that all employees who have company pensions receive detailed annual disclosures about their pension fund's investments. This will provide retirees important resources to make their pension fund more secure."
When/Where: Plan for America: "Blueprint for Change," dated 10/09/08
Source: Obama and Biden's documents/550007-barack-obama-2008-blueprint-for-change.html
Status:The Department of Labor Employee Benefits Security Administration (EBSA) issued final regulations relating to service provider disclosures under the Employee Retirement Income Security Act (ERISA) on 02/02/12. Under these new rules, "initial annual disclosure of 'plan-level' and 'investment-level' information...must be furnished no later than August 30, 2012...The first quarterly statement must then be furnished no later than November 14, 2012." Disclosures must be provided quarterly thereafter.

In 09/14, the Department of Labor published a "Reporting and Disclosure Guide for Employee Benefit Plans." Section 3 of this guide, entitled "Additional Disclosure Requirements for Pension Plans" specifies, among its 22 reporting requirements, the following:

- Periodic Pension Benefit Statement: Quarterly benefit statements for an employee or beneficiary account plan must provide the value of each investment to which assets in the account have been allocated.
- Qualified Default Investment Alternative Notice: 30 days advance notice to participants and beneficiaries describing the circumstances under which contributions or other assets will be invested on their behalf in a qualified default investment alternative with the option to opt-out of such investments.
- Participant Plan and Investment Fee Disclosures: General information about the pension plan and potential administrative and individual costs, as well as a "comparative chart" of key information about plan investment options, must be furnished annually. On at least a quarterly basis, participants must receive a statement of the dollar amount of administrative and individual (investment) fees that were charged to their accounts.

The objective of the above is to provide greater transparency to help employees plan for retirement and actively manage their retirement savings prior to and after retirement.

This promise was fulfilled.