Obama plan gives retirees options, pitches ‘portable’ late-life savings

The Obama administration is announcing proposals Tuesday to promote more workers enrolling in retirement savings plans, saying the initiatives could affect about 30 million U.S. employees, mostly at small businesses.

Labor Secretary Thomas E. Perez said the measures would give workers more “portability” to carry their retirement plans with them when they change jobs, and make it easier for small employers to join forces to create 401(k) or other savings plans and share the administrative costs.

“We have to build a retirement system that reflects the 21st century workplace,” Mr. Perez told reporters Monday.

Mr. Obama outlined some of the proposals in his State of the Union address two weeks ago.

Current law already allows many of the opportunities for workers to save for retirement, but administration officials said they want to reduce some barriers to encourage more employees to take advantage of options such as automatic enrollment in an individual retirement account (IRA).

As part of the administration’s effort, Mr. Obama will include a $100 million request in his fiscal 2017 budget proposal to Congress to create a “portable benefits pilot program” to examine what type of program works best.

Jeff Zients, White House director of the National Economic Council, called the proposals part of President Obama’s efforts to “update our social compact.” He said half of workers at companies with fewer than 50 employees don’t have retirement plans beyond Social Security.

The proposals follow Mr. Obama’s so-called “fiduciary rule,” an effort introduced last year to stop financial advisers from receiving financial rewards for steering customers into poor investments. That proposal, which has undergone a public comment period, would crack down on stockbrokers and other financial advisers who provide conflicted advice about retirement savings plans by requiring them to put their clients’ financial interests ahead of their own.