The Treasury Department is ending an ineffective Obama program that promised to help millions of Americans save for retirement, the government announced Friday.
Treasury announced the myRA program would be phased out, after costing taxpayers $70 million though few Americans used the program.
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Former president Barack Obama used his 2014 State of the Union address to launch the myRA program, with a promise to "help millions" to save for retirement. Two years later, only 20,000 had signed up.
"The myRA program was created to help low to middle income earners start saving for retirement," said Jovita Carranza, U.S. Treasurer. "Unfortunately, there has been very little demand for the program, and the cost to taxpayers cannot be justified by the assets in the program."
A review of the program by the Trump administration found that 20,000 accounts have a median balance of only $500. An additional 10,000 accounts had no money in them at all.
Program costs doubled that of Americans’ contributions into myRA. The program has cost taxpayers $70 million since 2014, and participants have contributed $34 million to their accounts. Going forward, the program would cost an additional $10 million in taxpayer funding each year.
Carranza said there are "ample private sector solutions" for Americans to utilize, rather than the cost ineffective myRA program. "We will be phasing out the myRA program over the coming months," she said. "We will be communicating frequently with participants to help facilitate a smooth transition to other investment opportunities."
The department said that participants in the program will be notified and can transfer their savings into another individual retirement account.
"We are committed to promoting retirement savings, and, as Treasurer, I plan to devote a substantial amount of my time to ensuring more Americans have the tools and knowhow to save for retirement," Carranza said.