Bill Overview
Title: Auto Reenroll Act of 2022
Description: This bill allows sponsors of automatic contribution arrangements that take effect after December 31, 2024, to reenroll their employees in such arrangements at least once every three years. The purpose of the bill is to increase employee participation in tax-exempt pension plans and other retirement arrangements.
Sponsors: Rep. Manning, Kathy E. [D-NC-6]
Target Audience
Population: Employees eligible for automatic contribution retirement plans
Estimated Size: 65000000
- The bill targets employees who are part of companies offering automatic contribution retirement plans.
- It focuses on people participating in or eligible for tax-exempt pension plans.
- These plans are more common in medium to large-sized corporations, especially those with structured human resources and financial services.
- The global workforce engaged in formal employment with access to pension plans, particularly in developed countries, will be affected.
- The initiative aims to boost retirement savings participation globally, which may include many developed countries with similar pension structures.
Reasoning
- The population mostly targeted by this policy includes employees in mid-sized to large organizations that offer retirement plans with automatic contributions.
- The budget constraints indicate a limited impact in the policy's initial years but with an expanding effect over time, as budget allocations increase.
- About 55% of the American workforce has access to retirement plans, but not all maximize their contributions. This policy could drive those numbers up, particularly within medium to large firms.
- The cost of reenrollment would include administration fees, communication to employees, and possibly incentives to maintain engagement.
- While about 65 million employees might be the target, not all are equally affected; those already actively managing their retirement plans may see minimal direct impact.
Simulated Interviews
Software Developer (New York, NY)
Age: 32 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 20.0 years
Commonness: 15/20
Statement of Opinion:
- I've been meaning to increase my contribution, but always put it off.
- This might be the push I need to set it and forget it.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 9 | 8 |
| Year 10 | 9 | 8 |
| Year 20 | 9 | 8 |
Project Manager (Phoenix, AZ)
Age: 45 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 15.0 years
Commonness: 10/20
Statement of Opinion:
- I know I should be saving more for retirement but it often slips my mind.
- This could help automate my financial responsibility.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 9 | 7 |
| Year 10 | 9 | 7 |
| Year 20 | 9 | 7 |
Graphic Designer (San Francisco, CA)
Age: 28 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 0.0 years
Commonness: 5/20
Statement of Opinion:
- This policy won't affect me since my company doesn't offer such plans.
- I hope it encourages more small businesses to start providing retirement plans.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 5 | 5 |
| Year 3 | 5 | 5 |
| Year 5 | 5 | 5 |
| Year 10 | 5 | 5 |
| Year 20 | 5 | 5 |
HR Consultant (Chicago, IL)
Age: 50 | Gender: male
Wellbeing Before Policy: 9
Duration of Impact: 0.0 years
Commonness: 3/20
Statement of Opinion:
- I think reenrollment could increase overall participation.
- It's good, but for me, it doesn't change anything.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 9 | 9 |
| Year 2 | 9 | 9 |
| Year 3 | 9 | 9 |
| Year 5 | 9 | 9 |
| Year 10 | 9 | 9 |
| Year 20 | 9 | 9 |
Marketing Manager (Seattle, WA)
Age: 38 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 10.0 years
Commonness: 12/20
Statement of Opinion:
- I am already contributing the max to my 401(k) credits.
- This policy seems more beneficial to those not fully engaged.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 8 | 8 |
| Year 10 | 8 | 8 |
| Year 20 | 8 | 8 |
IT Specialist (Austin, TX)
Age: 29 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 0.0 years
Commonness: 6/20
Statement of Opinion:
- My company doesn't have automatic contributions, so this doesn't apply to me.
- I could see it being beneficial if it encourages startups to begin such plans.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 6 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 6 | 6 |
Nurse (Miami, FL)
Age: 41 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 14/20
Statement of Opinion:
- I don't need to make any changes, but it's good for those who do.
- Reenrollment shouldn't force changes without prior consent.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 7 | 7 |
| Year 20 | 7 | 7 |
Factory Worker (Cleveland, OH)
Age: 55 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 15.0 years
Commonness: 11/20
Statement of Opinion:
- I don't save much for retirement—I know I should.
- If this gets me to save a bit more, it wouldn't be a bad thing.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 7 | 5 |
| Year 10 | 7 | 5 |
| Year 20 | 7 | 5 |
Teacher (Boston, MA)
Age: 48 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 7/20
Statement of Opinion:
- My retirement is mostly a defined benefit plan so changes might not affect me directly.
- Options to contribute more would be useful, but unlikely.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 6 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 6 | 6 |
Financial Analyst (Denver, CO)
Age: 36 | Gender: other
Wellbeing Before Policy: 9
Duration of Impact: 10.0 years
Commonness: 4/20
Statement of Opinion:
- I think it's a smart policy, but for me, I'm already on top of it.
- For people who aren't proactive, automatic reenrollment could be a game changer.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 9 | 9 |
| Year 2 | 9 | 9 |
| Year 3 | 9 | 9 |
| Year 5 | 9 | 9 |
| Year 10 | 9 | 9 |
| Year 20 | 9 | 9 |
Cost Estimates
Year 1: $10000000 (Low: $5000000, High: $15000000)
Year 2: $10000000 (Low: $5000000, High: $15000000)
Year 3: $10000000 (Low: $5000000, High: $15000000)
Year 5: $12000000 (Low: $6000000, High: $18000000)
Year 10: $15000000 (Low: $7500000, High: $22500000)
Year 100: $20000000 (Low: $10000000, High: $30000000)
Key Considerations
- The overall goal is to increase long-term savings for employees, improving financial security in retirement.
- The policy assumes compliance by employers and systems capable of supporting mandatory reenrollment.
- Immediate fiscal impacts are minor compared to potential long-term fiscal benefits due to reduced dependency on social programs.