IRA Provider Insights

State-Run Retirement Options in the Works

Posted by Dana Sheehan on Aug 4, 2016 9:26:36 AM

In a earlier post, we wrote about government-sponsored retirement options; today we shift focus from federal to state government. Many states are considering bills that will make retirement savings more accessible in an effort to ensure that more Americans will be secure in their golden years. Consider that a third of Americans have nothing saved for retirement (according to this article in Time: 1 in 3 Americans Has Saved $0 for Retirement) and 23% have saved less than $10,000. That means 56% of Americans have less than $10,000 saved. Worried yet? States are, and that’s why many of them are looking to provide a way for Americans to get out of their retirement troubles.

Retirement.pngConnecticut Approves State-Run Retirement Plan

Connecticut passed a bill on April 30 which will establish a state-run retirement program for employees working in the private sector. The bill will help employees who work at companies with at last five people that don’t offer a retirement plan by automatically enrolling them at a 3% rate.

California Secure Choice Retirement Plan Moves Forward

In March, California’s Secure Choice Retirement Savings Investment Board recommended the creation of the California Secure Choice Retirement Plan, which will become part of SB 1234. Stay up to date at AARP.org.

Colorado Postpones Security Savings Plan

The Colorado House postponed Bill 16-1403 indefinitely earlier this month in a unanimous vote.

Maryland Retirement Program Approved

The Maryland Small Business Retirement Saving Program and Trust was created in April and will take effect July 1, 2016.

What’s Next?

A number of states are in various stages of setting up retirement plans that will help non-public employees, most aimed at the 20% of American workers who do not already have access to employee-provided plans such as 401(k)s. Of course, if the federal government establishes Guaranteed Retirement Accounts, states that have already created their own programs will have to re-evaluate.

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Topics: state-run retirement, Payroll IRAs

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