PA lawmakers propose “Auto-IRA” accounts to remedy retirement “crisis”

HARRISBURG, Pa. --- A treasury report released Wednesday paints a bleak picture of retirement savings in the commonwealth.

According to the Retirement Security Task Force report, more than two million Pennsylvanians are working for employers who do not offer retirement plans.

Also, one third of people don't have a single dollar saved for retirement.

A bipartisan group of lawmakers believe the solution comes from an "Auto-IRA."

The proposal is a retirement account, similar to a Pennsylvania 529 account, in which the state sets up and facilitates an IRA account for employers.

“If you don’t have a retirement plan for employees, all you have to do is process an automatic payroll deduction so that employee can start saving their own money through this auto-IRA that would then follow them from job to job for the rest of their lives," said Treasurer Joe Torsella.

Torsella said he believes an auto-IRA account will help save taxpayer money when it comes to government assistance for retirees.

He also said it will put more money in retirees' pockets, allowing them to spend more and boost the state economy.

Torsella also noted there would be no obligation for employees to contribute to the auto-IRA.

State Senator Pat Browne (R-Lehigh) said the auto-IRA is not being forced on businesses.

He said the purpose is to help give employers access to offering a retirement savings plan, while helping people have financial security when leaving the workforce.

“To have a partnership with business where we can offer a retirement savings vehicle is something, I believe, will garner very strong support and we have a very good start, but you know it’s just going through the process and making sure we can get it done," said Browne.

No bills have been introduced yet.

Browne said he expects those in the coming weeks.

Both Browne and Torsella said they hope to have auto-IRA legislation passed this year.

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