The U.S. Treasury Department announced on Friday it is winding down the federal MyRA retirement savings program.
A Treasury Department news release said the decision to shut down the program came after "a thorough review" that found it "not cost effective," saying that demand since it was announced has been "extremely low" and that U.S. taxpayers have paid $70 million to maintain the program since 2014.
President Barack Obama announced the program in his State of the Union speech in January 2014, as a retirement savings bond program aimed at lower-wage workers not enrolled in retirement savings plans, with tax benefits similar to individual retirement accounts and accounts that could be rolled into IRAs when balances reach a sizable amount. MyRA, short for "My Retirement Account," officially launched in November 2015.
U.S. Treasurer Jovita Carranza in the Treasury Department news release said the department "will be communicating frequently with participants to help facilitate a smooth transition to other investment opportunities."
A group of leading congressional Democrats had asked Treasury Secretary Steven Mnuchin on July 14 to do more to promote the program. Sen. Patty Murray of Washington, ranking member of the Senate HELP Committee, and others implored the Treasury Department "to demonstrate its commitment to the MyRA program."
Ms. Murray in an emailed statement said: "I am deeply disappointed to see this administration repeatedly undermine and frankly kick the can down the road on every effort that could help hardworking families save for retirement. We are in the midst of a retirement crisis in this country. Democrats are ready to get to work for workers and retirees — it's time for President Trump to join us or get out of the way."
Lynn D. Dudley, senior vice president, global retirement and compensation policy, at the American Benefits Council, said the organization did not announce a position on the MyRA program when it was established but thought it was a well-intentioned program — and added that now the private sector needs to step up.
"New savers needs opportunities to save and they need help saving and we need to facilitate that and the best way to do that is to expand the private sector," Ms. Dudley said.
The program aimed to help workers with an annual income below $131,000 or $193,000 if married and filing taxes jointly, save by deducting a portion of their paycheck, checking or savings account or federal tax refund, to be invested in Treasury securities.