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Michigan Lawmakers Introduce Auto-IRA Bill

Could the next state-run retirement program for the private sector emerge from the Great Lakes State?

Last week, state Representatives Scott Dianda (D) and Robert Wittenberg (D) introduced House Bill 5776, creating the Michigan Secure Retirement Savings Program Act. According to a press release, the legislation, modeled after the Illinois Secure Choice Saving Program, would:


  • Require employers with 25 or more employees operating for two or more years to establish a payroll deduction plan that would automatically enroll workers in the state-run retirement plan with a 3% deferral. Workers could opt-out, or change that rate.

  • Require the state-run plan to offer several investment fund options, including age-based life cycle funds, growth funds, secure return funds and conservative principal protection funds. The age-based life cycle fund would be set as the default investment for employees joining the program.


Employers would not be required to make matching contributions, but they could choose to do so.

Though similar legislation has now been authorized in Connecticut, Massachusetts, and Maryland (and state-run marketplaces in Washington State and New Jersey) in addition to Illinois, the prospects for the Michigan bill in the current legislative environment, and with a legislature controlled by Republicans, is not seen as promising.



Visit our new state auto-IRA legislation resource center!




Dianda and Wittenberg have also introduced House Bill 5777, establishing a tax credit for Michigan residents participating in the proposed retirement savings program. The credit is based on the federal Retirement Savings Contributions Credit, which was enacted as a temporary provision in 2002, then became a permanent part of the tax code in 2006. A Michigan taxpayer can receive back from the state 50 percent of their federal credit or up to $500, whichever is less, according to the press release.

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