Putnam Investments requested Congress pass two recently-introduced bills that would require employers to automatically enroll employees in a payroll-deduction IRA,
The Boston fund company said that this could extend retirement savings coverage the “nearly half of all American workers who have no retirement savings plans through their jobs today.” Two bills, H.R 6099 and S. 3760, would require companies with more than 10 employees to automatically enroll them in a payroll-deduction IRA if they are not already covered by an employer-sponsored retirement plan.
“We have a great opportunity to extend coverage to many millions of American workers who have no access to retirement savings plans on the job,” said Robert L. Reynolds, Putnam’s chief executive officer. “This is a smart, low-cost idea that can give almost all working Americans a stake in our free enterprise system and help them secure their own futures at the same time. At the end of the day, all Americans would benefit from having a more inclusive, robust retirement savings system.”
Reynolds, who has long been an advocate of reforming the retirement savings system, said that concrete action is needed soon.
“The stakes are high – and rising – for our country,” he said. “Americans do want to save more, but have found it difficult to do so in this economy. Millions of people face a serious retirement income gap. We believe the single most effective way to close this gap is to automatically enroll workers in simple, low-cost retirement plans. By passing auto-IRA legislation, Congress could directly lift our national savings rate and help millions more workers achieve greater retirement security. It is the right thing to do.”
The Senate bill is the Automatic IRA Act of 2010 (S.3760), introduced by Sen. Jeff Bingaman of New Mexico and co-sponsored by Sen. John F. Kerry of Massachusetts. The House bill is the Automatic IRA Act of 2010 (H.R. 6099), introduced by Rep. Richard E. Neal of Massachusetts and co-sponsored by Rep. Pete Stark of California, Rep. Earl Blumenauer of Oregon and Rep. Allyson Y. Schwartz of Pennsylvania.
“I applaud the efforts of the leaders driving this important legislation for stepping up to the challenge of helping millions more working families save for retirement,” Reynolds said. “As the Baby Boom generation continues to march toward retirement age, this type of initiative will be vital in helping them achieve the dignified retirement they have worked for and deserve. This legislation is a step in the right direction. Let’s make it law.”
Since Reynolds became Putnam’s president and chief executive officer in July 2008, the company has deepened its commitment to the retirement market. This year, it launched a series of retirement initiatives, including an enhanced Web site for sponsors of 401(k) plans and other defined-contribution retirement plans, a Lifetime Income Analysis Tool for plan participants, and fee transparency disclosures in its effort to provide the clearest, most complete overview of fees and expenses in the workplace savings industry.