Representative Neal Introduces Automatic IRA Act of 2024 Bill
Representative Richard Neal (D-MA), House Ways and Means Committee Ranking Member, has introduced the Automatic IRA Act of 2024. Rep. Neal has proposed similar legislation in prior sessions of Congress. The current proposal would require employers without an existing employer-sponsored retirement plan to automatically enroll their employees in an automatic IRA arrangement or other automatic contribution plan or arrangement at a rate of at least 6 percent that increases annually to 10 percent of compensation beginning in 2027. This version of Rep. Neal’s proposal would exempt employers with no more than 10 employees, each of whom received at least $5,000 of compensation in the prior calendar year; governmental and church plans; employers that have been in existence for fewer than 2 years; and employers facilitating an arrangement under a qualified state law that was enacted before January 1, 2027, requiring an automatic IRA arrangement pursuant to a payroll deduction program. The proposed legislation includes the addition of a start-up tax credit for certain small employer automatic IRAs, similar to existing small employer plan start-up tax credits, and imposes an excise tax of $10 per participant per day on employers that fail to enroll their employees in an automatic contribution plan or arrangement.