Last week I mentioned the possibility that 401(k) limits might be reduced in 2010. This week, I wanted to highlight some proposed retirement savings changes that President Obama outlined in his weekly radio address. Here they are:
- Auto-enrollment in retirement plans. The administration plans on clearing up some of the bureaucratic hurdles that make auto-enrollment a challenge for small and medium-sized employers.
- Tax refunds as savings bonds. To encourage savings amongst those who receive a tax refund, you’ll be able to elect to receive your refund in the form of savings bonds.
- Convert unused sick/vacation days to 401(k) contributions. The White House intends to make it easier to convert unused sick and vacation days into 401(k) contributions.
Note that these changes aren’t forcing anything on employers, they’re just clearing the roadblocks that might be discouraging employers from doing these things. Moreover, these are largely technical changes, and thus don’t require legislative approval.
As for the changes themselves… The first and third sound great. The second one, on the other hand, seems kind of pointless. While it won’t hurt anything, I can’t imagine very many people taking advantage of it.