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Automatic IRA Act: Mandatory Workplace Retirement Savings Enrollment.

This law establishes a system where employees are automatically enrolled in Individual Retirement Accounts (IRAs) through payroll deductions unless they actively choose to opt out. The goal is to boost retirement savings, particularly for workers without existing employer-sponsored plans. Employers, with limited exceptions, must facilitate these automatic savings arrangements or face financial penalties.
Key points
Automatic Enrollment: Employees are defaulted into a retirement savings plan (IRA) using payroll deductions (opt-out system).
Contribution Escalation: Initial contribution starts at 6% of pay and automatically increases up to 10% over several years.
Employer Penalties: Companies failing to implement or facilitate these arrangements may face daily financial penalties ($10 per day per employee).
Small Business Credit: Eligible small employers can receive a $500 annual tax credit for the first three years of facilitating the program.
Default Roth IRA: Unless the employee makes an affirmative election, the IRA account will be treated as a designated Roth IRA.
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Introduced
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Additional Information
Print number: 119_HR_6722
Sponsor: Rep. Neal, Richard E. [D-MA-1]
Process start date: 2025-12-15
Lustra uses Artificial Intelligence. Verify details in source documents.
Summarized by: gemini-flash-latest
Source data: api.congress.gov
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OFFICIAL LEGAL TITLE

Automatic IRA Act of 2025

FREQUENTLY ASKED QUESTIONS

What is the official ID of this bill?

The official print number for this legislation is 119_HR_6722.

Which chamber initiated this legislation?

This legislation was initiated in the House of Representatives.

When did the legislative process begin?

The process officially started on 2025-12-15.

What are the main provisions?

Key points include:

  • Automatic Enrollment: Employees are defaulted into a retirement savings plan (IRA) using payroll deductions (opt-out system).
  • Contribution Escalation: Initial contribution starts at 6% of pay and automatically increases up to 10% over several years.
  • Employer Penalties: Companies failing to implement or facilitate these arrangements may face daily financial penalties ($10 per day per employee).
  • Small Business Credit: Eligible small employers can receive a $500 annual tax credit for the first three years of facilitating the program.
  • Default Roth IRA: Unless the employee makes an affirmative election, the IRA account will be treated as a designated Roth IRA.
What is the specific legal status?

The current status is Introduced.

Where can I read the full text of this legislation?

The full official text is available at: View full text

Who is the primary sponsor?

The primary sponsor is Rep. Neal, Richard E. [D-MA-1].

What is the latest detailed status?

The latest detailed status is: Referred to the House Committee on Ways and Means.

Is this summary verified?

Yes. This content was analyzed by AI and verified by the Lustra Judge System on 2025-12-31.

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