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Treasury Secretary Touts 'MyRAs'

Touting President Obama’s “MyRA” program, Labor Secretary Jacob Lew expanded on the proposal in a Jan. 30 letter. The new program is being created for low and middle income workers who do not have access to an employer-sponsored retirement plan, which is about 64% of private sector workers.

The initial investment can be as low as $25, and additional contributions, which can be made via payroll deduction, can be as low as $5. Employers will not have the option of auto-enrolling workers in a MyRA. There will be no fees. Contributions will be invested in Treasury securities and earn a variable interest rate. (The model seems to be the government securities investment fund of the federal Thrift Savings Plan.) Those earning under $191,000 a year are eligible to create a MyRA, with accounts rolling into a Roth once they reach $15,000.

Over the next few months, private firms will be engaged in competitive bidding to run the program.

Many experts are skeptical about how many people will contribute because of the voluntary nature of MyRAs and other factors. Additionally, there are numerous state proposals that would require companies not already offering a retirement plan to create one.

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