The plan is the perhaps unlikely brainchild of National Economic Council chief Kevin Hassett and a progressive economist, The New School professor Teresa Ghilarducci.
The White House did not respond to Fortune’s requests for comment or questions about Hassett’s work on retirement issues.
The last 15 years has created a perfect storm for major change to come to retirement policy, Ghilarducci explained. As 76 million baby boomers have retired and Gen X’s retirement is on the horizon, people have been disappointed in how their assets or 401(k)s have grown, she said.
“[Baby boomers are] uncertain about how much money they’re going to have and how long it’s going to last. That’s 50 million people that did not have this concern 20 years ago,” Ghilarducci said, explaining that many retirees “have been disappointed” by how their 401(k)s and assets have appreciated.
As millions retire, there has been a simultaneous increase in awareness about growing wealth inequality in the U.S., pointing to the Occupy Wall Street and Black Lives Matters movements that focus on wealth distribution.
The third and most important factor was “a quirky, bold leader,” she said, and the U.S. has found that in Trump. “Retirement security is a worker issue, and therefore a populist politician, like Donald Trump, has reasons to take it up.”
She said her concern for the depth of the retirement crisis has pushed her to move beyond politics. “I’ll work with anybody who says that workers need more security for all their life,” she said. “I think if I was younger, I would have these ideological, righteous concerns, but over time, the problem has just got too big for my righteous concerns.”
Due to her expertise, Ghilarducci is often invited to events and meetings with financial managers and economists on the right, she said. She is also a trustee for two pension funds for United Auto Workers retirees at General, Ford, and Chrysler, and steelworkers at Goodyear. “I’m very comfortable there,” she said. “I’m usually there to give another point of view.”
While it comes to retirement security, she said Hassett is just as “passionate” as she is, describing him as an “empathetic, emotional guy.” She said they bonded over being “PhD nerds” and their mutual commitment to making retirement better for more Americans. “There’s this empathy we have for old people, because we’re human and we’re going to get old.”
Specific details of the president’s plan for universal 401(k)s and how workers can enroll have not yet been released. Economists have estimated that a plan like Trump’s would help the poorest 25% of Americans save between $138,000 and $610,000 for their retirement.
“This plan has been thoroughly studied by hundreds of experts and professors for many years, and this is surely an idea whose time has come,” Ghilarducci said. “It should have happened earlier, before half of baby boomers retired. It would have really helped them.”
She said she believes that low-income workers need a bigger match than $1,000 each year and she hopes Congress will pass a more generous match for workers.
“This is an architecture, a design, where they have the best chance of putting some money in their accounts early in their life, keep it there and then,” she said. “When you do that, you take advantage of the magic of math, because compound interest kind of takes over for the workers’ contribution.”
