Trump to sign order expanding workers’ access to retirement plans

The Scoop

President Donald Trump will sign an executive order Thursday that seeks to expand access to retirement plans for workers whose employers don’t provide one, two White House officials told Semafor.

The administration will integrate its push with the so-called Saver’s Match, 2022 legislation that directs the federal government to match retirement-plan contributions from workers making less than $35,000 with up to $1,000 starting next year.

Semafor first reported in February that officials were exploring the idea, which the president later confirmed during his State of the Union address.

About 54 million people who work full- or part-time do not have access to an employer-provided retirement plan, according to the Economic Innovation Group. Some 27 million who qualify for the Saver’s Match do not have access to a plan where they can collect it.

Thursday’s executive order will seek to fix that by directing the Treasury Department to launch a new website, TrumpIRA.gov, by the time the Saver’s Match takes effect in January, one of the officials said. Under the order, workers could use that website to filter private-sector retirement plans by factors like cost, minimum contribution, and minimum balance so they can enroll in one that would allow them to collect the match if eligible.

The official told Semafor that the structure was chosen to give workers access to a more lucrative mix of investments akin to the government’s Thrift Savings Plan. A government-run IRA for private-sector workers, like former President Barack Obama’s now-defunct myRA, would likely have been constrained to Treasury bonds, which have a lower rate of return.

Treasury will vet the plans on the website — but not partner with specific financial institutions as it did with recently enacted Trump Accounts, the official said.

The website is not expected to bigfoot states that require employers that don’t provide retirement plans to automatically enroll their workers in a state-run IRA.

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The executive order will also direct Treasury to publicize the match and to issue guidance for private-sector donors who want to contribute to the workers’ IRAs. There has already been a lot of interest in the latter, said the official, who likened the idea to the Dells’ commitment to seed Trump Accounts for children.

In addition, the executive order will tap Treasury and the National Economic Council to draft legislative recommendations that could expand the concept further, including by automatically enrolling workers and by making more workers eligible for the match (though the latter would require additional funds).

NEC Director Kevin Hassett, a longtime advocate for expanding the TSP to the private sector, previously advocated for a related proposal that Sens. John Hickenlooper, D-Colo., and Thom Tillis, R-N.C., plus Reps. Lloyd Smucker, R-Pa., and Terri Sewell, D-Ala., reintroduced last year.

The work Assistant Secretary of the Treasury for Financial Institutions Luke Pettit “did to make it possible to get the Trump Accounts going makes it easier for us to set up 401(k) accounts for people who have employers that don’t do that,” Hassett said at a financial literacy event hosted by the Spark Institute last month.

“It’s our belief that between these two things, and existing programs, that we’re going to be creating — forget about a political party, just a generation of Americans who have skin in the game,” Hassett added. “I believe that in the end, when we look back at the policy legacy of this administration, that these will be two of the most transformative policies.”

Workers on average contributed more to the TSP when employers matched their contribution, the Congressional Budget Office found in 2019.

Notable

• Trump Accounts won over Wall Street quickly, as we reported.