The Treasury Department and the Internal Revenue Service are trying to get more employers to offer myRA retirement accounts to employees.
They have begun offering posters, infographics, intranet content, emails and more on a special section of the Treasury Department's Web site to spread the word about the new program to employees.
The myRA, short for “my Retirement Account,” is supposed to function as a way to set up a retirement account for people who do not have access to an employer-sponsored retirement plan. Individuals can open a myRA account with no start-up cost and there are no fees for maintaining the account. myRA has no minimum contribution requirement either.
President Obama introduced the myRA account in his State of the Union address last year, but so far the accounts have not caught on with many employers (see Obama Plans 'MyRA' Retirement Savings Accounts). A pilot program that began last December has so far been made available only to to the U.S. Office of Personnel Management and a small group of private employers who are helping the Treeasury Department test the program to ensure the user experience is simple and straightforward before the program is rolled out more broadly.
myRA is designed for people without access to employer-sponsored retirement savings plans. Because myRA follows Roth IRA rules, savers (or their spouses, if married filing jointly) must have taxable compensation to be eligible to contribute to a myRA account and generally must earn an annual income of less than $131,000 for individuals, and $193,000 for married couples filing jointly.
Contributions to myRA accounts are invested in a new United States Treasury security, which earns interest at the same variable rate as investments in the government securities fund for federal employees. This fund has had an average annual return of 3.19 percent over the 10-year period ending December 2014.
Savers can contribute to their myRA accounts as little as a few dollars a month up to $5,500 per year (or $6,500 per year for individuals who will be 50 years of age or older at the end of the year). The myRA account can have a maximum balance of $15,000 or a lower balance for up to 30 years. When either of these limits is reached, savings will have to be transferred or rolled over into a private-sector Roth IRA. A transfer or rollover to the private sector allows savers to continue to grow their savings past the maturity of their myRA starter savings account. Savers can choose to transfer or roll over their account balance into a private-sector Roth IRA at any time.
Currently, savers can fund their myRA accounts from their paychecks, as long as their employer offers direct deposit and is able to direct a portion of the paycheck to the myRA account. Additional methods to contribute to myRA accounts will become available in the future, including ways for savers to contribute directly to their myRA accounts.
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