Retirement Savings Security

Memorandum of January 29, 2014

Retirement Savings Security

Memorandum for the Secretary of the Treasury

All Americans deserve the ability to save for
retirement. Since taking office, my Administration has
committed to strengthening retirement security for all
Americans, including by helping workers find ways to
save for retirement and to protect those hard earned
savings. Unfortunately, too few Americans have enough
savings to maintain their standard of living in
retirement.

But we know there are proven strategies that can help
the average family save. Workplace-based retirement
savings that allow workers to automatically take a
portion of their pay and put it into a retirement
account can increase retirement savings dramatically.
Approximately 9 out of 10 workers automatically
enrolled in a 401(k) plan continue to make
contributions to that account compared to the less than
1 out of 10 eligible workers who voluntarily contribute
to Individual Retirement Accounts. The positive effect
of automatic contributions is especially pronounced
among lower-income households and others with
traditionally low savings rates.

Unfortunately, only about half of all American workers
have access to employer-sponsored retirement savings
accounts. It is clear that we cannot continue on this
course.

The Department of the Treasury has worked diligently to
develop a new tool that can make long-term savings a
reality for more working Americans. A new kind of
retirement savings tool could help American families as
they start to build for their retirement. In order to
make this tool available to working Americans, I hereby
direct as follows:

Section 1. Retirement Savings Security. (a) By December
31, 2014, you shall finalize the development of a new
retirement savings security that can be made available
through employers to their employees. This security
shall be focused on reaching new and small-dollar
savers and shall have low barriers to entry, including
a low minimum opening amount. In developing this
security, you shall ensure that it:

(i) protects the principal contributed while earning interest at a rate
based on yields on outstanding Treasury securities;

(ii) offers savers the flexibility to take money out if they have an
emergency and keep the same Treasury security if they change jobs; and

(iii) is designed to help savers start on a path to long-term saving and
serve as a stepping stone to the broader array of retirement products
available in today's marketplace.

(b) Within 90 days of the date of this memorandum,
you shall begin work with employers, stakeholders, and,
as appropriate, other Federal agencies to develop a
pilot project to make the security developed pursuant
to subsection (a) of this section available through
payroll deduction to facilitate easy and automatic
contributions.

Sec. 2. General Provisions. (a) Nothing in this
memorandum shall be construed to impair or otherwise
affect:

(i) the authority granted by law to a department or agency, or the head
thereof; or

(ii) the functions of the Director of the Office of Management and Budget
relating to budgetary, administrative, or legislative proposals.

(b) This memorandum shall be implemented consistent
with applicable law and subject to the availability of
appropriations.
(c) This memorandum is not intended to, and does
not, create any right or benefit, substantive or
procedural, enforceable at law or in equity by any
party against the United States, its departments,
agencies, or entities, its officers, employees, or
agents, or any other person.
(d) You are authorized and directed to publish this
memorandum in the Federal Register.

THE WHITE HOUSE,

Washington, January 29, 2014.