Pointing out that most workers do not have pensions, Obama first announced that the Treasury will create a new kind of savings account, called MyRAs (a play on Individual Retirement Account, or IRAs), to allow workers to invest in risk-free Treasury assets.
A pension industry executive briefed by the White House on the MyRA plans explained to Bloomberg that MyRAs would allow workers to deduct a portion of their paychecks to deposit in a special account at the Treasury that would be invested in bonds on a tax-privileged basis, similar to the way that other retirement plans offered through employers such as 401(k)s are treated by the tax code. The policy would be intended to allow workers who do not have access to such a plan through work the ability to enjoy tax-advantaged retirement savings.
That executive action would allow the president to address the fact that 53 percent of American workers are at risk of entering retirement with insufficient savings, according to the Boston College Center for Retirement Research. It would not require action by Congress.
Obama did ask for legislation from Congress, telling them to "offer every American access to an automatic IRA on the job, so they can save at work just like everyone in this chamber can." Although Obama offered no further details, that plan likely would require businesses to auto-enroll employees in IRAs unless they opted out, with the purpose of nudging workers to save more of their paychecks than they otherwise would.