“Under the proposal, starting in 2023, employers with five or more employees would have to offer a retirement plan and automatically enroll employees, diverting 6% of their pay to a retirement account. An automatic escalation clause would increase the automatic contribution to 10% of pay by year five. The default plan would be a Roth IRA invested in a target-date fund, a mix of investments based on your expected retirement year.
“For employers, it’s a mandate. They would have to offer the plans. Employees would be able to opt out.”
For employers who already offer a 401(k) or similar plan, nothing would change; this is targeted at small employers who do not now offer any such plan.
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