The U.S. government has decided to wind down the myRA program, an Obama-era initiative aimed at small retirement savers.
The program was available to workers with no employer-sponsored retirement plan, such as a 401(k), and with little money to invest. It allowed workers to have part of their pay deposited into a tax-deferred account that invested in U.S. government bonds. Workers could start investments with as little as $25 and add payroll contributions as low as $5. Once a worker had accumulated $15,000, she would have to move it to an IRA.
The Treasury Department cited cost as the reason to end the myRA program. "Demand for and investment in the myRA program has been extremely low," it said in a statement. "American taxpayers have paid nearly $70 million to manage the program since 2014." About 20,000 accounts have been opened since 2015, and the program had a total of $34 million in assets.
"The myRA program was created to help low to middle income earners start saving for retirement. Unfortunately, there has been very little demand for the program, and the cost to taxpayers cannot be justified by the assets in the program. Fortunately, ample private sector solutions exist, which resulted in less appeal for myRA. We will be phasing out the myRA program over the coming months. We will be communicating frequently with participants to help facilitate a smooth transition to other investment opportunities," said Jovita Carranza, U.S. Treasurer.
Participants are encouraged to visit myRA.gov for additional information or to call myRA customer support with any questions.
The Trump administration last month signed legislation killing state auto-IRA rules, another Obama-era initiative that would allow states to set up retirement plans for workers. The regulation created a safe harbor under which states could establish automatic-enrollment, payroll-deduction individual retirement accounts for private-sector workers who don't have access to a retirement plan through their employer. Five states — California, Connecticut, Illinois, Maryland and Oregon — have passed legislation to create such auto-IRA programs.