Obama pitches “myRA” retirement savings plan

On his second out-of-town stop to promote his 2014 State of the Union agenda, President Obama pitched a retirement savings plan he hopes will nudge more Americans into planning for their future.

The so-called “myRA” program will be geared toward workers whose employers do not offer a retirement account. Workers can open a plan for as little as $25, and contribute just $5 at a time through payroll deductions, and take plans with them when they change jobs. Even better for the workers who will enroll in these plans is the fact that they are backed by the U.S. government and will never go down in value.

These types of savings accounts, the president said, will “help shift the odds back in favor of working and middle-class Americans.”

“I want more people to have the chance to save for retirement through their hard work, and this is just one step we can take to help people do that,” he said. The president noted that retirement used to be a “three-legged stool” where workers could rely on a pension, Social Security and private savings support themselves after they stopped working. For the past several decades, pension plans have been dwindling and replaced by defined-contribution plans, though fewer than half of employers offer any kind of retirement plan at all.

The president spoke from the United States Steel Corporation Irvin Plant in West Mifflin, Pa. After his speech, he signed a presidential memorandum creating the savings-account program and handed it off to Treasury Secretary Jack Lew, who was in attendance.

Mr. Obama said he would like to do more to boost retirement security, but can only do so if Congress decides to join him. One idea he floated – taking away tax breaks that encourage saving among the wealthiest Americans but not the middle class – could be nonstarters with a Republican Congress.

But that won’t stop him, Mr. Obama said. “Weneed to give every American access to some kind of automatic IRA,” he said. “I could do more with congress but I’m not going to not do anything without congress, not when its about the basic security and the dignity of the American worker.

Earlier in the day, he spoke about the benefits of raising the minimum wage at a Costco wholesale store in Maryland. He offered some of the same themes in the Pittsburgh speech, talking about how the recession had been especially hard on the middle class and his desire to make sure every American child has access to education.

  • Rebecca Kaplan

    Rebecca Kaplan is a political reporter for CBSNews.com.