>The Post reported that House Ways and Means Chairman Bill Thomas (R-California) signaled the automatic enrollment move in talks with lobbyists.
>According to the Post sources, Thomas has also suggested to life insurance interests that he would back incentives for employers to convert K plan balances to private annuities. In exchange, the life insurance industry would not work against a dramatic expansion of Individual Retirement Accounts, 401(k)s and tax incentives designed to expand personal retirement savings, according to the deal. Other measures designed to promote the option – and remove some of the current state law impediments to the feature have been introduced previously (see Cardin’s Pension Legislation Would Repeal Roth 401(k) Option , 401(k) Automatic Enrollment Support Bill Introduced in Congress , PSCA Throws Weight Behind Automatic Enrollment Bill ).
>The auto enrollment notion is likely to be popular since recent research has shown that participation rates soar among companies with automatic enrollment. Also employers like the idea because increasing K plan enrollment can cut their plan administration costs (See Auto Enrollment Choices Impact Cost, Participation ).
>The annuity suggestion, however, could be more controversial, according to a GOP lobbyist quoted by the Post. Converting 401(k) balances to privately managed annuities (See After Math ) could eat into workers’ savings balances, according to the report.