Treasury's myRA Website By Curtis Tatum, Esq.
Includes APA Recommendations
In 2014, President Obama outlined a new retirement program called my Retirement Account (myRA) designed for individuals who do not have access to an employer-sponsored retirement plan. Early information about the plan indicated that the individual accounts would be funded solely through payroll direct deposit.
Due to the potential impact on payroll professionals, the APA invited Mark Iwry, a senior Treasury official, to discuss the program at the 2014 APA Capital Summit. During his presentation, Iwry requested help in finding volunteers for a myRA pilot program. The APA's Government Relations Task Force responded by creating the myRA Subcommittee that has worked both to recruit volunteers for the program and to provide recommendations to ensure that the administrative burden on employers would be kept to a minimum.
Throughout 2014, the Department of the Treasury worked toward its goal of offering myRA accounts, at least to "early adopters," before the end of the year. Late in the year, Treasury updated the myRA website to allow individuals to create myRA accounts. The updated website also provides a wealth of new information for individuals and employers, but included in the new information are also several updates to the myRA program that are consistent with APA recommendations and comments.
The Future of myRA
While initial myRA accounts may only be funded through payroll direct deposit, Treasury hopes to expand funding options. There are several places on the updated myRA website where Treasury indicates that it is working to make additional methods of funding available. More information about the current status and the future of myRA will be available at the 2015 APA Capital Summit, where Mark Iwry will address the topic once again. The APA myRA Subcommittee will continue to work with Treasury to help in the development of the program.
Information for Individuals and Employers
The main myRA website is divided into two sections, one for individuals and one for employers. Each section contains extensive resource materials.
The individual portion of the website provides a number of educational materials. Individuals can use a savings calculator to determine how their savings will grow over time. In a section on payroll direct deposit, a multiple-choice questionnaire helps individuals determine whether they have the ability to fund a myRA account. If the answers indicate that the individual works for an employer that offers direct deposit and that the employer will "be able to set up a portion of your paycheck to be deposited into a myRA account," the individual is offered a link to sign up for a myRA account. If the individual does not know whether the employer can process a direct deposit transaction to a myRA account, the questionnaire provides a link to an "employer letter," that the individual can use to help determine eligibility. There are a number of additional individual resources, including a welcome letter, a direct deposit form, and a Questions and Answers page.
The section of the website designed for employers includes an employer resources page is similar the individual resources page. This page contains promotional materials that are designed to advertise the program to employees. These materials include: an employer guide, posters (green and blue versions), and an informational brochure. Sample email messages aid employers in their communications with employees. Intranet content and additional documents are in a toolkit for use in a meeting with employees. The employer section also emphasizes that the program should have "no cost to employers," and that employers "don't administer employee accounts, contribute to them, or match employee contributions. The employer's sole role in the process is to tell its employees about myRA and set up payroll direct deposit for their myRA accounts if they choose to participate." Treasury has worked hard to make the program as simple as possible for employers.
Treasury has modified its initial myRA program in several ways to reduce the administrative burden for payroll professionals. Treasury originally indicated that individuals would be able to open an account with a beginning balance of $25 and then could make deposits of as little as $5. The myRA Subcommittee noted that this would require at least two separate direct deposit forms. Treasury's new description does not include a required opening balance.
Similarly, the original program description included a minimum payment of $5. The myRA Subcommittee questioned whether a direct deposit transaction would be rejected if an employee had less than $5 available for a voluntary deduction. The new language does not include a minimum payment.
The subcommittee also recommended that individuals be given a direct deposit form that includes account information. The subcommittee hopes that the form will help ensure that payroll is provided with accurate numbers. Treasury's website states that "individuals will be able to print out a direct deposit form when they open an account, or use the one" that will be included in a welcome package that will be sent in the mail.
myRA Subcommittee Review
During its December conference call, the myRA Subcommittee reviewed many of the recent modifications to the myRA website and is assembling a new set of recommendations to submit to Treasury. The subcommittee noted that while there is no longer a mention of a minimum contribution level, there are different and potentially confusing descriptions of deposit amounts. For instance, one page states: "whether you can regularly save $7, $25, $50 or $100 a month, myRA is a simple and reliable way to kick start saving for your future." A second suggests "$2, $20, $200 -- whatever fits your budget!" And a third indicates that you can "decide how much you want to save -- as little as a few dollars a month up to $5,500 per year."
The subcommittee recommends a consistent description of potential contribution amounts. The subcommittee also noted that it may not be obvious to individuals that they can actually use the savings calculator on the website. APA plans to continue its review of the website and likely will submit recommendations and comments in early 2015.