Make a list of the most toxic words in American politics, and “employer mandate” certainly would be in the top 10. Requiring employers to provide health insurance to workers is one of the most controversial features of the Affordable Care Act – along with the requirement that individuals buy insurance.
But a mandatory retirement savings program might just have a shot at success in Washington as part of a broader bipartisan attempt to address the looming retirement security crisis. The idea is getting a push from a politically unlikely duo: labor economist Teresa Ghilarducci and Tony James, president of Blackstone Group LP, the global asset management firm…
— Reuters Money (@ReutersMoney) March 18, 2016
Ghilarducci has long advocated replacing 401(k)s with a federally managed retirement savings plan called Guaranteed Retirement Accounts (GRAs), and now she has teamed up with James to push the idea. The two recently published a white paper outlining a joint version of Ghilarducci’s GRA idea. Ghilarducci also is serving on a commission on retirement security and personal saving organized by the Bipartisan Policy Center (BPC), which will report its findings in May – and is expected to reflect at least some features of the GRA.
The 401(k), a tax-deferred workplace-based vehicle for saving and investing for retirement, requires individuals to make their own investment decisions. Some 401(k) plans have high fees – and they are not designed to provide a guaranteed lifelong income stream.