AUTOMATIC IRA BILL AIMS TO BOOST RETIREMENT SECURITY FOR MILLIONS

WASHINGTON, D.C. – More employees would be provided access to workplace retirement plans under legislation introduced today by Rep. Richard Neal (D-Mass.) and supported by the Insured Retirement Institute (IRI).

Under the proposal, the Automatic IRA Act of 2025, employers with at least 10 employees would be required to provide or arrange for access to an automatic retirement contribution plan for all full-time and long-term part-time employees. Workers would be automatically enrolled with the flexibility to opt out at any time.

Additionally, the bill includes provisions to help workers convert their savings into guaranteed income. Employers would be required to offer employees with at least $200,000 in vested savings the option to convert up to half their balance into a protected lifetime income solution, such as an annuity.

“Far too many workers are left without the ability to save through their job, and this bill offers a smart, practical solution to close that gap,” said Wayne Chopus, President and CEO of IRI. “By expanding access and strengthening savings tools, Congressman Neal’s legislation will help workers and retirees achieve a secure and dignified retirement.”

Currently, nearly half of U.S. workers lack access to a retirement savings plan through their employer. Of these, about two-thirds work at businesses with 10 or more employees. The lack of coverage disproportionately impacts workers of color: nearly two-thirds of Latino workers, more than half of Black workers, and nearly half of Asian workers do not have a workplace retirement plan.

A study of the impact of such a new law on workers’ retirement security found that $7 trillion in additional retirement savings would be generated, and 62 million new retirement savers would be created over ten years. Ninety-eight percent of new savers would earn less than $100,000 annually, including 7 million new Black savers and 10.8 million new Latino savers.

According to IRI research, interest in lifetime income is especially strong among mid-career workers. Seven in 10 workers aged 40–45 say they are likely to allocate part of their retirement savings to annuities, and nearly 9 in 10 agree it is important that their income be protected for life.

The legislation also recognizes the growing role of non-traditional, or “gig” work. It directs the Treasury Secretary to, by regulation or other guidance, provide for making available automatic IRAs to individuals who provide services to the employer that do not constitute employment.

The Automatic IRA Act of 2025 builds on bipartisan progress made through the SECURE Act of 2019 and the SECURE 2.0 Act, which created new pathways for small businesses to provide their employees with a workplace retirement savings plan.

Those laws created pooled employer plans (PEPs), authorized and expanded tax incentives to cover costs of starting a plan, and reduced administrative barriers to offering protected, guaranteed lifetime income solutions in retirement plans.

These policies provide employers with practical tools that simplify compliance with the new coverage requirements established by the Automatic IRA Act of 2025, while offering more employees meaningful opportunities to save.

Rep. Neal, a longtime champion of retirement security, first introduced the Automatic IRA Act in 2017. IRI was the first industry trade association to endorse the proposal and continues to prioritize its passage in its Federal Retirement Security Blueprint.

“Retirement security is foundational to economic dignity,” Chopus said. “Congress has the opportunity to give tens of millions of workers a chance to save and retire with confidence. We look forward to working with Congressman Neal and other congressional leaders to advance retirement security for more workers and retirees.”

Automatic IRA Act bill text

Automatic IRA Act bill summary

IRI letter of support for Automatic IRA Act

 

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Contact: Dan Zielinski