In a State of the Union address filled with references to HR and benefit issues, President Obama called for the creation of a government-backed retirement account, acknowledged the student loan crisis and wage inequality, outlined his efforts to close the skills gap and called on employers to raise wages.
The president also touched briefly on the Affordable Care Act, challenging Republicans to let Americans know what their specific plans [are] to cut costs, cover more people, and increase choice. In the official GOP response, Rep. Cathy McMorris Rodgers (R-Wash.) acknowledged we shouldnt go back to the way things were, but this law is not working. Republicans believe health care choices should be yours, not the governments.
Obama outlined plans for a new retirement account, dubbed MyRA, that will invest in savings bonds. From what I can tell, this MyRA accounts sounds very similar to what federal workers have access to through their [Thrift Savings Plan], says Tim Courtney, chief investment officer with Exencial Wealth Advisors in Oklahoma City. Theyre buying government securities that arent marketable; theyre specifically for that retirement plan so theres no price fluctuation.
Courtney believes if the MyRA gains traction, it could affect workplace retirement plans because its another program that is available to employees. Employees potentially may choose to go this fixed route. but it sounds like it still wont compete with the deferred compensation side of 401(k)s because it looks like theres only one investment option inside of it and I dont think the balances can get too high, he says.
Saying that its time to do away with workplace policies that belong in a Mad Men episode, and acknowledging the embarrassment that women make 77 cents for every dollar a man earns, the president urged Congress without offering specifics to work with the White House and corporate America to give every woman the opportunity she deserves.
Profitable corporations like Costco see higher wages as the smart way to boost productivity and reduce turnover. We should too, Obama said, announcing his plan to require federal contractors to pay their federally funded employees a wage of at least $10.10 an hour.
President Obamas discussions on college affordability, job-driven training efforts at community colleges and launching retirement investments for all workers are welcome news, said Carla D. Thompson, vice president, program strategy with the W.K. Kellogg Foundation, an organization that funds projects aimed at breaking the cycle of poverty.
Obama praised Senate Democrats and Republicans for acting to fix Americas broken immigration system, and said that independent economists say immigration reform will grow our economy and shrink our deficits by almost $1 trillion in the next two decades.
On student loan debt, Obama said his administration is offering millions the opportunity to cap their monthly student loan payments to 10% of their income, and I want to work with Congress to see how we can help even more Americans who feel trapped by student loan debt.
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