U.S. President Barack Obama announced on Saturday a series of what he called "common-sense steps" to make it easier for workers to save for retirement, citing an urgent need after the recession wiped out $2 trillion in retirement savings over the past two years. The changes, which he outlined in his weekly radio address, are largely technical and do not need congressional approval to implement. They are meant to encourage workers to put any extra pay or cash, including unused leave time and tax refunds, directly into retirement accounts, rather than spend it. Obama said the Treasury Department would simplify rules, making it easier for workers to automatically enroll in an employee-sponsored 401(k) and other retirement plans, to use federal tax refunds to buy savings bonds directly, and to permit unused sick and vacation leave to be transferred directly to savings plans. In addition, the Treasury Department and Internal Revenue Service are publishing a "plain-English" guide to retirement accounts, including how to roll over savings when changing jobs or plans. "The fact is, even before this recession hit, the savings rate was essentially zero, while borrowing had risen and credit card debt had increased," Obama said. "Many were simply struggling to stay afloat as incomes were stagnant -- or falling -- and jobs were scarce." "But there were also those who spent beyond their means," Obama continued. "And more broadly, tens of millions of families have been, for a variety of reasons, unable to put away enough money for a secure retirement." Speaking on Labor Day weekend, the president said that 78 million people, or roughly half the U.S. labor force, do not have a retirement savings plan through their work. Moreover, fewer than 10 percent of those without employer-sponsored plans contribute to a private savings plan outside the job. Obama said the steps announced Saturday are intended to build on proposals included in his budget, including an automatic IRA-enrollment plan and a government tax-credit matching program to encourage low- and middle-income families to save. Those measures are pending before congressional committees now busy with health-care legislation. "We cannot continue on this course," he said. "If you work hard and meet your responsibilities, this country is going to honor our collective responsibility to you: to ensure that you can save and secure your retirement."
