GAO: Auto Enrollment, Mandatory Participation in Retirement Plans Can Boost Retirement Income
The U.S. Government Accountability Office spent a year reviewing alternative retirement plan designs abroad and proposals for new plan designs in the United States to determine which features in these plans could potentially address retirement risks currently faced by American workers. GAO modeled the impact on retirement income potential from defined contribution plans in three scenarios: mandated universal access, automatic enrollment, and mandated employee participation. GAO found that universal access and mandated employee participation together would increase the share of workers with some defined contribution plan savings at retirement from a current 67 percent level to 97 percent. It would raise the equivalent annuity benefit from a baseline of $15,217 a year to $21,312 a year. In a scenario where there is mandated access and automatic enrollment, but no required employee participation, the results are almost as impressive: the share of workers with savings at retirement rises t...