New Retirement Initiative in President's 2017 Budget Includes Employer Mandates

Employment Law

President Obama's budget to be released on February 9 will include a legislative proposal to require large employers to make their existing retirement plans available to part-time workers and require employers that currently do not offer a retirement plan to automatically enroll their employees in an IRA.  Specifically, the President will propose that employees who have worked for an employer at least 500 hours per year for at least three years be eligible to participate in their employer's existing plan.  The President's plan would also provide tax credits for small businesses that begin offering retirement plans—or choose to automatically enroll workers in existing plans—and enable small businesses to create pooled 401(k) plans.  According to the White House, the proposal would automatically enroll approximately 30 million workers without access to workplace retirement plans in IRAs.  A number of the retirement proposals in the 2017 budget have been included in previous budgets, and are unlikely to be enacted this year as well.