Mark Iwry, who built the program over nearly six years while he served as senior adviser to the Treasury secretary during the Obama administration, said it had been designed to have many uses over time. Besides being a safe way to introduce people to saving for retirement, it was expected to serve as a key investment option within some state-run retirement programs — geared to the tens of millions of people without access to employer-sponsored plans — that are in the process of being created.
The program was also seen as a place to direct a portion of a tax refund, and as a bucket of sorts that could be used to capture the small sums that are automatically rolled over by employers from larger 401(k) plans when workers change jobs.
“The decision to cancel the myRA in its introductory phase reflects a fundamental misunderstanding of its purposes and potential as a long-term investment in working families’ economic security and financial independence,” Mr. Iwry said. “There are several legitimate ways to assess a program’s costs and benefits — prematurely is not one of them.”
The closing of myRA is the latest step taken by the Trump administration to reverse Obama-era savings initiatives and investor protections. In his first month in office, President Trump requested the review of a rule that requires brokers to put their customers’ interest first when handling their retirement money. He later signed a joint resolution that reversed a rule that would have made it easier for states to create their own retirement savings programs.
Several states — including California, Illinois and Oregon — are moving ahead anyway. And while some states had plans to include myRA as a “safe” investment alternative, that will no longer be an option.
The program “offers a really good solution,” said Tobias Read, state treasurer of Oregon, which is running a pilot of its retirement savings plan this month and had expected to use myRA as its “capital preservation” alternative. “Without it, we will be forced to look at other options, which frankly aren’t as good for that purpose.”
On July 14, a group of Democrats in Congress wrote a letter to Steven Mnuchin, the Treasury secretary, asking that his department demonstrate its support for the myRA program.
“Given that this administration has worked to reduce access to retirement plans for millions of Americans,” the letter said, “it is more critical than ever for the Treasury to strengthen one of their remaining options for retirement savings.”
