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Iwry: Expanding, Enhancing Participation Key to Retirement Saving

The way to move forward in promoting retirement saving is not to dismantle the 401(k) and employer-based system — far from it. Rather, we should continue to refine the system and expand coverage and participation. That was the message conveyed by Mark Iwry, Senior Advisor to the Secretary of the Treasury and Deputy Treasury Assistant Secretary (Tax Policy) for Retirement and Health Policy, at the NAPA DC Fly-In Forum on Sept. 30. 

A persistent problem that the Treasury Department did not anticipate was the literal interpretation of examples in auto-enrollment guidance that were built on a 3% default rate, Iwry told the Fly-In delegates. That number was meant to serve merely as an example of an auto enrollment rate, Iwry said, noting that Treasury has found it hard to shake the common misperception that it is a mandated number. He noted that Treasury has repeatedly issued materials that cite other contribution levels, and that it continues to work to get the word out that the 3% rate is not a requirement or threshold with which participants must comply by law or regulation. 

Treasury is open to suggestions on how to ease the process of saving for retirement, Iwry told the Fly-In delegates. The department is considering correction procedures for employers that have problems with auto-enrollment and auto-escalation and that may have made mistakes in implementation. And it is interested in enhancing flexibility regarding mid-year changes to increase participation.