More New Retirement Account Proposals

Americans are way short in their retirement savings, and President Obama's MyRA plan, which he unveiled last week, isn't the only new proposal that aims to help with that problem.

Sens. Susan Collins, R-Maine, and Bill Nelson, D-Fla., also offered a savings plan. Sen. Tom Harkin, D-Iowa, has one of his own, which follows a report he released last summer.

Of these three proposals, Harkin's is the most ambitious. His Universal, Secure and Adaptable (USA) Retirement Funds would create a hybrid of pensions and 401(k) plans now offered by employers. Like a pension, the accounts would pay a monthly annuity for life. They would be privately run by professional managers, and workers could take their accounts with them if they change jobs.

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Workers would automatically be enrolled in a USA Fund, with 6 percent of their income invested, but could opt out if they wanted.

Studies show that automatic enrollment makes a huge difference in getting workers to save for retirement, says Karen Friedman, executive vice president of the Pension Rights Center, which advocates for worker pensions.

The bill by Collins and Nelson, leaders of the Senate Special Committee on Aging, encourages small businesses to offer savings plans by reducing the costs and red tape.  And the plans could increase how much a company can contribute in matching funds from the current 6 percent, up to 10 percent. Companies with fewer than 100 workers would get a tax break for their matching contribution.

The bill also would let low- and middle-income taxpayers who use the 1040 EZ form get a tax credit for contributing to an IRA or employer plan instead of having to fill out a longer form.

The Harkin plan and the Collins-Nelson plan require congressional approval; Obama's MyRA does not.

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