ERIC and NAGDCA ask IRS to simplify Saver's Match deposit routing

The ERISA Industry Committee asked the IRS on Monday to route the first Saver's Match deposits through the same rollover machinery that already moves money between retirement accounts, rather than build new systems for a federal subsidy whose first payments arrive in 2028.

The comments rest on what plans already have. Andy Banducci, ERIC's senior vice president of retirement and compensation policy, said large employers are excited to add government money to workers' retirement savings as long as it moves through the systems those plans support. "Moving these dollars through a standard rollover lets workers benefit without forcing plans to build new tracking systems or send sensitive employee data to the government," Banducci said in a release, adding that he appreciated the IRS's flexibility in confirming that plans will not be required to accept the contributions.

The National Association of Government Defined Contribution Administrators made a related request in its own letter to the agency, urging a design simple enough to administer at wide scale, and the public plan sponsor group backed the Saver's Match on its merits, citing its potential to encourage saving among lower- and moderate-income workers.

Those workers are the program's statutory target. Created by the SECURE 2.0 Act of 2022, the Saver's Match lets the U.S. Treasury deposit up to $1,000 into an eligible taxpayer's retirement account, with payments following the worker's 2028 tax filing and reflecting contributions made for the 2027 tax year. It provides a maximum 50% match on the first $2,000 of qualified contributions to an employer-sponsored plan or an IRA, replacing the existing Saver's Credit, and under the framework set out in Notice 2026-48 the money goes into an "appropriate retirement savings vehicle" the taxpayer designates, including a non-Roth IRA or a plan, so long as the vehicle is established for the eligible individual and accepts the contributions.

That last condition is where the routing question sits. Because plans can refuse the deposits, the system needs a destination for workers whose employer plan opts out or who have no plan at all. It is the same problem ERIC raised with Treasury when the group asked to make BNY the clearinghouse for employer Trump Account contributions, on the logic that employers cannot fund accounts they cannot verify; the Saver's Match and the Trump Accounts, as this publication has argued, are being built as enrollment infrastructure ahead of distribution infrastructure.

ERIC's proposal would handle the first half by treating a government contribution like a plan-to-plan transfer, but that route only works if an originating account and a receiving account can be matched to one taxpayer, and the comments do not say how the IRS answered them. With the first dollars due after 2027 tax filings, the agency has roughly a filing season to settle whether the rollover path, or something closer to a direct deposit, becomes the default for a subsidy aimed at households that often have no account to receive it.