A Universal 401(k) Plan

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For those with access, America's private pension system provides powerful saving incentives: tax breaks and employer contributions, as well as the convenience and discipline of automatic payroll deduction and professional asset management. Unfortunately, this employer-based system covers only half of all workers. Moreover, two-thirds of the tax breaks for retirement saving go to the most affluent 20 percent who would save anyway.

The solution is a Universal 401(k) plan. All workers would have the option to contribute automatically to their own plan by payroll deduction -- and the government would match voluntary deposits with refundable tax credits deposited directly into the worker's account. This supplemental system would make retirement saving easier, automatic, fully portable, and fair.

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