Pension Participation and Uncovered Workers

by Nadia Karamcheva and Geoffrey Sanzenbacher

August 2010

IB#10-13

Introduction

In 2008, the Obama campaign proposed a “Plan to Strengthen Retirement Security.”  This plan consisted of items ranging from increasing the threshold of the Social Security payroll tax to expanding the Saver’s Credit for families earning under $75,000.  One of the more far-reaching proposals would require employers with 10 or more employees to automatically enroll their employees in Individual Retirement Accounts (IRAs).  As a default, 3 percent of each worker’s earnings would be invested in a low-risk portfolio, but workers could choose to change the defaults or opt out of the plan.  Employers would not be required to make a matching contribution, but employees who participate would be eligible for the expanded Saver’s Credit...

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