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Note: The following text is a quote:

http://www.whitehouse.gov/assets/documents/Retirement_Savings_Fact_Sheet.pdf

RETIREMENT SECURITY FOR AMERICAN FAMILIES

“If you work hard your whole life, you ought to have every opportunity to retire with dignity and
financial security. And as a nation we ought to do all we can to ensure that folks have sensible,
affordable options to save for retirement.”
— President Barack Obama

As many as 78 million working Americans—about half the workforce—don’t have a retirement
savings plan at work. Fewer than 10 percent of those without plans at work contribute to a plan
of their own. Our nation needs to do more to help families save and give them better choices to
reach a secure retirement.

Today, President Barack Obama and Secretary Tim Geithner announced new steps to make it
easier for American families to save for retirement. These new initiatives will complement the
president’s major legislative proposals to boost participation in IRAs and match retirement
savings. The Department of the Treasury will:

• Expand opportunities for automatic enrollment in 401(k) and other retirement savings plans,
• Make it easier for more than 100 million families to save a portion or all of their tax refunds,
• Enable workers to convert their unused vacation or other similar leave into additional
retirement savings, and
• Help workers and their employers better understand the available options for tax-favored
retirement saving through clear, easy-to-understand language.

Together, these steps will expand the range of choices for workers who want to save and will
make saving easier for millions of Americans.

NEW INITIATIVES TO HELP FAMILIES SAVE

(1) Expand Automatic Enrollment in 401(k) and Other Retirement Savings Plans: Under
automatic 401(k) plans, employers directly deposit a small percentage of each paycheck into
workers’ retirement accounts. Employees maintain full choice over whether and how much they
want to save. Each employee can choose to opt out of the plan or save a different amount, and
employers can easily match employee contributions. Automatic enrollment boosts participation
in 401(k) retirement plans from about 70 percent to more than 90 percent, and it is particularly
effective in increasing the participation of low-income and minority workers. But while nearly
half of larger companies with 401(k) plans have adopted automatic enrollment, fewer medium-
sized or small businesses have done so. The Administration will

• Streamline the process for 401(k) plans to adopt automatic enrollment. Plan sponsors
typically seek Internal Revenue Service approval of plan amendments to ensure legal
compliance. By issuing pre-approved automatic enrollment language, the IRS will allow plan
sponsors to amend their plans to adopt automatic enrollment more quickly, without the need
for case-by-case approval by the IRS.

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• Make it easier to increase saving over time. A promising approach to boosting retirement
savings is to gradually increase automatic worker contributions over time. For example,
workers could dedicate a portion of their pay raises to retirement savings or be put on a path
to save a higher percentage of their pay every year, while remaining free to stop the increases
or opt out entirely at any time. Treasury and the IRS are releasing a ruling explaining how
401(k) plans can use this automatic increase feature.

• Allow automatic enrollment in SIMPLE-IRAs. The SIMPLE-IRA combines the basic
elements of 401(k) plans and IRAs, creating an easily administrable retirement plan that
small businesses can offer to their employees. An estimated 3 to 4 million SIMPLE-IRA
accounts exist, but workers are not automatically enrolled. Treasury and IRS are now issuing
guidance to help interested employers automatically enroll employees in SIMPLE-IRA plans
so long as employees are free to opt out.

(2) Create Easier Ways to Save Tax Refunds: More than 100 million families receive federal
income tax refunds each year. Averaging more than $2,000, tax refunds present a unique
opportunity for families to save. Taxpayers can already instruct the IRS to directly deposit their
refunds and dedicate a portion to an IRA or other savings vehicle. Today, the Treasury and IRS
announced that taxpayers will have another savings option beginning in early 2010 — the ability
to use their refunds to purchase U.S. savings bonds simply by checking a box on their tax return,
without having to open an account at Treasury or take any other action, and even if the taxpayer
doesn’t have a bank account. The savings bonds would be mailed to the taxpayer. Taxpayers will
be able to purchase bonds in their own names beginning in 2010 and to add co-owners such as
children or grandchildren beginning in 2011.

(3) Allow Unused Leave to Be Converted to 401(k) Savings: Every year, millions of workers
leave their jobs and receive substantial payments, often in cash, for unused vacation or other
similar leave. For many employees, this money could easily be saved. Treasury and the IRS are
issuing two rulings today describing how employers can allow their employees to contribute
those amounts to their 401(k) plan. As an alternative, the rulings also give employers the option
of making their own contribution of these amounts to their employees’ 401(k) or other plan.

(4) Explain Saving Options: Employees changing jobs and receiving payments from a
retirement plan face a number of choices, including a tax-free “rollover” of their benefits to
another retirement account. These choices are not always well understood. Today, Treasury and
the IRS are issuing a plain-English road map for rollovers to help workers keep their savings in
tax-favored retirement plans or IRAs until they are ready to retire, rather than withdrawing cash
earlier, subject to tax penalties. The road map is an updated model notice for plans to give
departing employees. It clearly explains how to roll over plan balances, the key decisions, and
the tax consequences. In addition, the IRS has created new user-friendly web site materials to
help employers select an appropriate retirement plan and to help employees better understand the
benefits of saving for retirement.

To read the Treasury and IRS rulings and materials, please visit http://www.irs.gov/retirement.

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BUILDING ON EXISTING OBAMA RETIREMENT PROPOSALS

The Obama Administration is committed to giving tens of millions more Americans more and
better choices to save for retirement through their jobs and receive tax benefits for doing so. The
president will continue to work to expand and strengthen employment-based retirement security.
Today’s steps complement two important initiatives included in President Obama’s budget:

• Create Automatic IRAs: IRAs are intended to give a tax-favored saving opportunity to the
millions of workers — about half the American work force — who have no workplace
retirement plan. Yet fewer than 1 out of 10 workers who are eligible to make tax-favored
contributions to an IRA actually contribute to an IRA, while 9 out of 10 workers
automatically enrolled in a 401(k) plan continue to make contributions. When enacted by
Congress, the Administration’s proposal will automatically enroll workers without workplace
retirement plans in IRAs through payroll deposit contributions at the workplace. The
contributions will be voluntary — employees will be free to opt out — and matched by the
Savers Tax Credit for eligible families.

• Reform and Expand the Savers Credit to Match Retirement Savings: The expanded
Savers Tax Credit will match the retirement savings of millions of families. It will match half
of families’ savings up to $500 per individual each year and deposit the tax credits directly
into the individual’s 401(k) plan account or IRA. The credit will be available to low- and
middle-income working families, including those who earn too little to owe income taxes.

There is so much in this that raises concerns for me. How much of this is being implemented by presidential edict? Where is the authority to do these things?

Out of it all, this excerpt is the scariest

More than 100 million families receive federal income tax refunds each year. Averaging more than $2,000, tax refunds present a unique opportunity for families to save. Taxpayers can already instruct the IRS to directly deposit their refunds and dedicate a portion to an IRA or other savings vehicle. Today, the Treasury and IRS announced that taxpayers will have another savings option beginning in early 2010 — the ability to use their refunds to purchase U.S. savings bonds simply by checking a box on their tax return, without having to open an account at Treasury or take any other action, and even if the taxpayer doesn’t have a bank account. The savings bonds would be mailed to the taxpayer. Taxpayers will be able to purchase bonds in their own names beginning in 2010 and to add co-owners such as children or grandchildren beginning in 2011.

So many problems with this. First, 100 million Americans are currently allowing their money to be used interest free by the government. Collectively, we are floating a $200 billion dollar interest free loan to the treasury (if the figures given are to be believed). That’s a bad thing. Freepers, please, review your tax situation. If you are getting a “refund” that’s a very bad thing. You are giving the government an interest free loan. And you risk not getting that money back. Ask your friends from California about this. Everyone should check their tax situation, and claim your deductions and exemptions so that your withholding is as close as possible to your actual tax bill. Try hard to make you April 15 “annual settlement” with the tax man an amount less than $100.

Then, the “savings bond” for your “tax refund” is just a voluntary (for now) way to get people used to the idea of getting their money back in the for of an IOU. How long before the US treasury issues IOU's to everyone, like California. How long until the check box on the form is automatically filled in for you.

Much better to endorse your “refund check” and deposit it in your personal IRA. Better still, divide your typical “refund” amount by 12, and set up an automatic monthly transfer into your IRA for that amount, and adjust your withholding to put that much back into your paycheck. You'll get interest or dividends from your IRA for the entire year for the money you would have given interest free to the government.

And I’m very skeptical about the “automatic” stuff _resident Obama speaks of in this plan. Where does the Congress (article 1) or the Executive (article 2) get the power to open any savings account, IRA or whatever on my behalf?

The fact that the _resident is suggesting the savings bond for your tax refund makes me wonder how long before refunds will be held up in limbo because the money isn't there to return.