Coming on the heels of President Obama’s announcement that he would use an executive order to create the MyRA savings program, Sen. Tom Harkin (D-IA) has introduced legislation in the Senate to propose his own solution to the nation’s retirement savings crisis. Harkin, who chairs the committee on Health, Education, Labor and Pensions, offered his “USA Retirement Funds Act” as a way to increase savings rates and expand coverage for those without access to an employer-sponsored plan.
The plan would create privately-managed retirement savings accounts available to all workers, with an automatic enrollment rate of 6 percent, although opting out is possible. These accounts also function like an annuity, with monthly benefits being paid for the entire life of the enrollee.
So far, Harkin’s proposal has drawn praise from the Service Employees International Union and the American Income Life Insurance Company.