The Accidental Plan Sponsor®

Jan 17, 2023

Season 2 Episode 5: This Odd Couple’s Auto IRA Proposal

The Auto IRA concept has been one of the most influential proposals to address gaps in the current US retirement system, namely the persistent coverage gap for small private-sector employers. Josh and guest co-host for the next few episodes, Michael Kreps, discuss the genesis of auto-IRAs with two individuals from different political backgrounds who came together to conceive and promote the proposal and implementation efforts: guests David John and Mark Iwry. David is a Senior Policy Advisor at the AARP Public Policy Institute and the Deputy Director for the Retirement Security Project at the Brookings Institution. Mark is a former Deputy Assistant Secretary for the US Treasury, a Nonresident Senior Fellow at Brookings, and a visiting scholar at the Wharton School. Tune in to hear how David and John’s paths crossed to result in the bipartisan Auto-IRA now operating in several states today. Key Takeaways: [:14] Lorenzo and Yolanda Harris have been operating Janico Building Services for more than 30 years. [1:07] The Harris were facing the same issue that millions of small businesses in the US encounter today, the ability to provide a low-cost quality workplace retirement savings vehicle for their employees. [1:33] Janico was the first company to provide an Auto RAA program to their employees. [5:13] Michael Kreps, Principal, Chair of Retirement Services Practice, introduces himself. [6:51] Michael shares the emphasis for this part of season 2. [8:10] There have been decades of proposals about how to fix the retirement system. Michael talks about how some things turned better and sometimes worse, but the Auto RAA is one of the most influential proposals in recent history. [9:00] David Jone introduces himself. [9:55] David shares how he began working with congressmen. [10:30] Mark Iwry talks about his professional and personal journey. [11:50] Mark wanted to make the world a better place through public policy, and he found a mentor to whom he talks about [13:52] Mark found his passion the healthcare reform. [15:18] Mark explains why the initiative was out of the norm. [17:08] They were trying to solve a pendent issue in the US retirement system. [17:28] Pension simplification was introduced by Mark with simple RIA. [18:49] Mark and David got together to combine concepts. [20:21] How did Mark and David, coming from such different backgrounds, come together with a proposal? [22:15] Mark and David talk about when the idea of auto RAA came about. [24:15] David shares what happened at the Heritage Foundation Auditorium. [25:02] To which employers did the original legislation apply? [26:26] Who will run these plans? [26:49] Josh explains a Threat Saving Plan (TSP). [27:35] One of the primary goals of the TSP proposal was to encourage more adoption of private-sector savings. [29:01] Mark and David tested the program, and over time people recognize it was something they could do to attract better-quality employees and keep them. [30:45] Mark and David started to get offers from lawmakers. [31:38] David and Mark got both presidential candidates to endorse their proposal. [33:44] The auto RAA was included in many of Obama’s budgets, but Obama Care happened. [34:56] They couldn’t get the proposal pass at a Federal level, but they could still try at the state level. [36:54] David was very reluctant about trying the auto RAA at a state level. [38:33] David talks about the employer's role in the auto RAA as the plan sponsor. [40:48] Thankfully, David and Mark continue to be active. [42:05] Michael talks about the impact of Mark and David’s work on the auto RAA concept. [44:15] David and Mark have been pushing for decades for the auto RAA to become a reality. Thank you for tuning in. If you liked what you heard, please subscribe and leave us a review wherever you listen to your podcasts. Links: The Accidental Plan Sponsor Mentioned in this episode: More about Janico Building Services More about Michael Kreps More about Mark Iwry More about David Jone

47 min