Obama to propose expanding access to 401(k), other retirement plans

In his 2017 budget for Congress, President Obama will propose helping small businesses provide 401(k) and other retirement plans to up to 30 million U.S. workers, the White House said on Monday. The proposals, teased in Obama's final State of the Union address, include reducing compliance and cost barriers for businesses employing 50 people or less, allowing them to band together to create 401(k) plans, even if they are in different industries; requiring businesses with at least 10 employees but no retirement plans to automatically enroll workers in an IRA, with tax incentives thrown in; making companies with retirement plans open them up to certain long-time, part-time workers; and a pilot program to help employees take their retirement savings with them to their next job.

The proposals require action by the Republican-led Congress, but the White House insists that there's broad support for the programs. "These items shouldn't be particularly controversial," said Labor Secretary Tom Perez. "In fact a lot of these ideas enjoy bipartisan support and have bipartisan roots," like auto-enrolling employees in a retirement plan. Small businesses worry about administrative and compliance costs of retirement plans. "What we're trying to do is recognize those barriers and address them," Perez said.