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Wyden: Income Equality Solution Targets Retirement Plans

 

In remarks at a recent conference on income inequality, Sen. Ron Wyden (D-Ore.), the incoming Chairman of the Senate Finance Committee, may have tipped his hand on how he will treat employer-provided retirement plans, advocating the simplification and consolidation of “the array” of current retirement savings accounts. Wyden also said he would like to move toward a system of automatic savings for workers.

Wyden’s remarks align him with recent comments by President Obama, Senate Majority Leader Harry Reid and other Democrats zeroing in on income equality. “This is an important time in terms of talking about the growing inequality of opportunity in our country,” Wyden told conference attendees. “I want a tax code in America where everybody has a chance to get ahead,” he told attendees.

Retirement plans seem to be a part of Wyden’s equation for addressing income inequality. He outlined an ambitious plan to simplify and consolidate existing retirement savings vehicles, noting “how important it is to simplify the array of retirement savings and security.”

“We have retirement savings, we have defined benefit plans, defined contribution plans, 401(k)s, 403(b)s, SIMPLEs, SEPs, IRAs, and the list goes on and on. The tax reform I proposed moved to consolidate those,” Wyden said. “If we really want to get retirement savings to get the maximum bang for those dollars, we ought to make it possible to consolidate them, and I’d also like to see ways to initiate automatic retirement savings for workers.”

Wyden contends that this consolidation will increase options for retirement saving. “We want to maximize choice for the consumer in a way that consolidates programs,” he argued.

Wyden also espouses a universal savings-from-birth plan. “I believe that at the time of birth a savings account should be established for every child born in the United States,” he said. He sees myRAs as part of that effort, and supports bringing the myRA proposal to fruition through administrative action, bypassing legislation entirely. Said Wyden, “The president in the myRA kind of approach seems to be thinking that he wants to have kind of the best of two worlds — sort of a new savings bond kind of approach that blends into that, and I’m very open to that, and we’ll obviously have to see if you can do it administratively.”

Wyden’s remarks were part of his keynote address to a conference put on by the University of Southern California Gould School of Law and the Urban-Brookings Tax Policy Center, “Growing Income Inequality: Is Tax Policy the Cause, the Cure or Irrelevant?” A video of the address is posted here.

John Iekel is a writer/editor for ASPPA and its sister organizations, including NAPA Net.