Mark Iwry
From a young age, J. Mark Iwry had “a classic idealistic interest in making the world better and improving people’s lives,” he said.
He would end up as a retirement industry expert who formulated and directed the issuance of landmark automatic enrollment guidance from the Treasury Department and the IRS.
Now holding three degrees from Harvard University, he pursued and earned his master’s degree in public policy at the same time as his law degree, as he viewed the law as a potentially powerful tool for working in the policy field, he said.
He first practiced law in the private sector on the advice of a mentor, who told him he should gain experience practicing law in Washington, at the intersection between the public and private sector. This proved to be helpful training for working in public policy, he said, and he landed his first role in government as the Treasury Department’s deputy benefits tax counsel.
Retirement security — which Iwry’s now a resident expert in — was not always his focus, he said, but over time, he came to hone in on employee benefits like retirement and health care, which included a hand in developing and implementing the Affordable Care Act.
From 2009 to 2017, Iwry served, simultaneously, as a senior adviser to the secretary of the Treasury and the department’s deputy assistant secretary for retirement and health policy, which is a role he carved out for himself. It also happens to be his favorite job of his career, he said, which spans more than 30 years focused on employee benefits.
Using his private sector experience, Iwry said that role gave him the opportunity to enhance retirement and health security for working families, while making laws and regulations “more user-friendly and workable” for families, plan sponsors and service providers.
Today, Iwry is a nonresident senior fellow in economic studies at the Brookings Institution and a visiting scholar at the Wharton School, but since the late 1990s, he had a major hand in several consequential developments in the retirement savings space.
In 1998, Iwry collaborated with his team at the Treasury Department and the IRS to define automatic enrollment and issue guidance on it. Iwry then helped draft an early version of the Pension Protection Act of 2006, which removed impediments for plan sponsors looking to automatically enroll employees in their 401(k) plans.
More than 15 years later, Congress included a provision in SECURE 2.0, the retirement security package that passed in December, to require automatic enrollment for newly created 401(k) and 403(b) plans, with the option for employees to opt out. Plans can automatically enroll employees at a rate between 3% and 10%, with the amount increasing by 1 percentage point annually until it reaches between 10% and 15%, and certain plans are exempted.
While that provision won’t take effect until 2025, experts have said the move could greatly increase enrollment in retirement plans.
Iwry and his colleagues at the Treasury also helped develop the saver’s credit, which Congress first enacted in a truncated form in 2001.
As another provision in SECURE 2.0, the saver's credit will soon be expanded and restored to reflect Iwry’s original 1999 proposal. Starting in 2027, low- and middle-income workers that contribute to a workplace retirement plan or IRA will be eligible for a tax credit in the form of a 50% match from the federal government on up to $2,000 that they put into their accounts.
Under the new program, however, workers will still receive the match even if they have no tax liability, as the money will be deposited directly into their retirement accounts. This helps level the playing field, Iwry said, though the improvements won’t take effect until more than 25 years after he first proposed the idea.
In 2006, Iwry co-authored a proposal for the automatic IRA in collaboration with a senior fellow at The Heritage Foundation to develop a “bipartisan, non-ideological approach” to expanding retirement coverage, he said. While the proposal never took off on a federal level, Iwry’s work eventually led several states to enact their own auto-IRA programs, he said.
He had hoped for the state programs to serve as “a kind of pilot project,” he said, providing proof of concept that a nationwide federal auto-IRA initiative would work well.
While Iwry never thought of state-by-state initiatives as preferable to a nationwide program, he said he’s encouraged by the increasing expansion of auto-IRA programs.
There are currently 15 states that have enacted auto-IRA programs, according to the Georgetown Center for Retirement Initiatives.
In his view, Congress should take action to help remaining states enact similar programs, while bolstering existing programs and promoting uniformity among them.
“Federal legislation could do a lot to accelerate and universalize (this) movement” by extending it nationwide, he said.
Iwry described the auto IRA as “an inherently bipartisan idea,” noting that both former Sen. John McCain and former President Barack Obama supported the idea in their 2008 presidential campaigns.
The state programs have also led to the creation of more 401(k) plans by small employers, which he said was always a key part of the proposal’s goal.
Ultimately, federal legislation on the auto IRA is the “single biggest missing piece to support and augment the state movement to expand coverage,” he said.
When asked about the possibility of a SECURE 3.0, Iwry said, “We don’t have SECURE 3.0 in the works.”
It’s unlikely that there will be another large package of retirement legislation in the near term, he added, but there doesn’t need to be 90 or 100 legislative provisions enacted in order to make important improvements to the system, he said.
Future legislative priorities should include federal legislation on the auto IRA, increased support for the saver’s match, and further improving access to workplace retirement plans for part-time workers, he said.
Under SECURE 2.0, part-time workers that work at least 500 hours a year for two consecutive years become eligible for their employer’s retirement plan, whereas Iwry suggests further lowering that standard to just a 500-hour requirement without any time element involved.
Prior to the approval of automatic enrollment, 401(k) plans put a host of decision-making on individuals — which Iwry said is the biggest shift he’s seen in the retirement industry. Unlike defined contribution plans such as profit sharing or money purchase pension plans, early 401(k) plans primarily relied on individuals to sign up for the plan, decide how much to save and decide how to invest, which often resulted in stalled participation, he said.
Now, Iwry and others have been striving to “nudge the system back” to one with less decision-making through things like automatic enrollment and contribution increases.
Ultimately, employee benefits should not be something people are “left to their own devices to handle,” he said, but rather a set of plans and programs that help people while still allowing them to exercise some individual choice.
