WH Unveils ObamaSave: Employer Mandate, Mandatory Enrollment, State-Run Marketplaces

Craig Bannister | January 26, 2016
Font Size


Tuesday, the White House unveiled a plan to overhaul retirement savings that is eerily similar to ObamaCare in at least three fundamental ways.

Introduced as a “Fact Sheet” on WhiteHouse.gov, Pres. Obama’s plan to revamp retirement savings mimics his controversial healthcare law:

  1. Individual participation is required, not optional,
  2. There’s an employer mandate,
  3. State-run marketplaces are created

The employer mandate would require employers to “automatically enroll their workers in an IRA” – with, or without, their consent – making employee participation compulsory:

Proposed to automatically enroll workers without access to a workplace plan in an IRA.  The President’s Budget will include a proposal – included in his past Budgets – that would require employers with more than 10 employees that do not currently offer a retirement plan to automatically enroll their workers in an IRA. Other individuals not automatically enrolled could participate so long as they fall below the income cutoff, and could continue to make their own contributions even if they change jobs.”

And, despite the failures of ObamaCare’s state-run health care exchanges, the president’s savings plan looks to create similar state-run “retirement marketplaces” for savings plans:

“The Administration has facilitated state efforts to create their own retirement savings options for their citizens”

“Issued proposed rule and guidance facilitating state efforts to create their own retirement savings programs. Over the past year, Illinois and Oregon have enacted their own state-level auto-IRAs, while Washington and New Jersey have enacted retirement marketplaces connecting small businesses and their employees to existing investment vehicles. Approximately 20 more states are considering similar measures or an alternative state-based 401(k).”

This would require increased government regulation:

“To address concerns about preemption by Federal pension law, the Department of Labor has proposed regulations and issued guidance clarifying a legal path forward, and will finalize those regulations later this year.”

And, like ObamaCare, “ObamaSave” is promoted as a plan to increase “access”:

“Expanding Access to Workplace Retirement Accounts

"Access to workplace retirement savings plans is key to workers’ future economic security.  Today, one out of three workers does not have access to a retirement savings plan, including half of workers at firms with fewer than 50 employees and more than three-quarters of part-time workers. In addition, contractors and temporary employees are often unable to participate in employment-based plans. Workers without access to a plan at work rarely save for retirement: fewer than 10 percent of workers without access to a workplace plan contribute to a retirement savings account on their own.”

But, also like ObamaCare, that “access” isn’t optional.

Foreshadowing his plan in his State of the Union address, Obama likened it to ObamaCare, promising that even unemployed Americans will still have “coverage”:

“That’s why Social Security and Medicare are more important than ever. We shouldn’t weaken them; we should strengthen them. (Applause.) And for Americans short of retirement, basic benefits should be just as mobile as everything else is today. That, by the way, is what the Affordable Care Act is all about. It’s about filling the gaps in employer-based care so that when you lose a job, or you go back to school, or you strike out and launch that new business, you’ll still have coverage.”