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: Sen. Kaine, Tim [D-VA]
Target Audience
Population: Employees with automatic contribution retirement plans
Estimated Size: 90000000
- The bill is targeted at employees in the workforce who are part of or eligible for automatic contribution arrangements in pension or retirement plans.
- Automatic contribution arrangement sponsors will be directly affected as they will need to facilitate the reenrollment process every three years.
- All employees who have opted out of automatic contribution plans or changed their contribution level may see an automatic reenrollment.
- This bill impacts those countries where automatic contribution arrangements apply, mostly in developed nations with structured pension systems.
- Given that this is a US bill, it is primarily aimed at impacting employees working for organizations in the United States.
Reasoning
- The Auto Reenroll Act of 2022 targets employees with automatic contribution plans in the US. While not all participants are aware of or fully utilize these plans, the policy could significantly increase retirement savings among those who might otherwise have low contributions or none at all.
- This policy could encourage long-term financial security, especially for those who are not actively managing their retirement plans. However, for some, automatic reenrollment could feel like an overreach, affecting their perception more than actual financial wellbeing.
- We include a diverse array of perspectives, given the varied nature of US employment—from those excited about increased savings potential to those indifferent or skeptical about mandatory financial decisions. The direct financial impact on employers running these plans is not evaluated in individual interviews as it affects employees indirectly.
- Lastly, given the budget constraints, the policy aims for gradual, systemic changes rather than immediate, large-scale shifts in behavior. Many might not feel the impact instantly, but over a decade, a shift in savings culture could be observed.
Simulated Interviews
Marketing Specialist (Denver, CO)
Age: 29 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 14/20
Statement of Opinion:
- I sometimes forget to adjust my retirement contributions, so auto-reenroll seems helpful.
- I worry about not having enough savings when I retire.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 8 | 6 |
| Year 10 | 9 | 7 |
| Year 20 | 9 | 7 |
Software Engineer (San Francisco, CA)
Age: 41 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 3.0 years
Commonness: 15/20
Statement of Opinion:
- I already optimize my retirement contributions each year.
- Automatic reenrollment is good for those who are not as proactive.
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 | 9 |
Teacher (Dallas, TX)
Age: 35 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 5.0 years
Commonness: 12/20
Statement of Opinion:
- I prefer to have more control over my salary deductions.
- The auto-increase might help me save more, though I hope it's optional.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 7 | 6 |
| Year 20 | 8 | 7 |
Retail Worker (Miami, FL)
Age: 24 | Gender: other
Wellbeing Before Policy: 4
Duration of Impact: 20.0 years
Commonness: 10/20
Statement of Opinion:
- I haven't thought much about retirement yet.
- Automatic savings could help since I might forget to save on my own.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 4 |
| Year 2 | 6 | 4 |
| Year 3 | 6 | 4 |
| Year 5 | 7 | 5 |
| Year 10 | 8 | 5 |
| Year 20 | 9 | 6 |
Construction Supervisor (Chicago, IL)
Age: 50 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 16/20
Statement of Opinion:
- My priorities are immediate expenses and kids' college, not more savings.
- I'm not against it but don't see much value personally.
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 | 7 | 6 |
Healthcare Worker (Seattle, WA)
Age: 32 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 14/20
Statement of Opinion:
- I want to ensure my retirement is comfortably funded.
- This reenrollment policy might help maintain my contribution level.
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 | 8 | 8 |
| Year 10 | 9 | 8 |
| Year 20 | 9 | 8 |
Freelance Graphic Designer (New York, NY)
Age: 45 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 0.0 years
Commonness: 8/20
Statement of Opinion:
- I don't participate in a typical employer plan, so this bill won't impact me.
- I'm aware it helps others who might need structured savings.
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 |
Administrative Assistant (Austin, TX)
Age: 60 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 3.0 years
Commonness: 13/20
Statement of Opinion:
- It's a good policy for younger people, but for someone close to retirement, it won't affect me much.
- I'm more focused on maintaining current savings.
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 |
Sales Manager (Los Angeles, CA)
Age: 38 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 10.0 years
Commonness: 14/20
Statement of Opinion:
- I already diversify my savings beyond employer plans, so auto-enroll won't make a difference.
- It might help my team members who aren't financially savvy.
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 | 8 | 7 |
| Year 10 | 8 | 7 |
| Year 20 | 9 | 8 |
HR Specialist (Nashville, TN)
Age: 52 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 13/20
Statement of Opinion:
- I think regular reenrollment could help many employees not paying attention to their retirement contributions.
- It might be additional work for HR each cycle, though.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 8 | 7 |
| Year 10 | 8 | 7 |
| Year 20 | 8 | 7 |
Cost Estimates
Year 1: $50000000 (Low: $30000000, High: $70000000)
Year 2: $52000000 (Low: $32000000, High: $72000000)
Year 3: $54000000 (Low: $34000000, High: $74000000)
Year 5: $58000000 (Low: $38000000, High: $78000000)
Year 10: $65000000 (Low: $45000000, High: $85000000)
Year 100: $0 (Low: $0, High: $0)
Key Considerations
- The participation rate in automatic contribution plans is critical to the success of the policy.
- The administrative burden on employers must be manageable to avoid compliance issues.
- Potential for increased disposable income among retirees because of higher savings.