Another Step Toward CT Retirement Security Program
Thursday, August 17, 2017
HARTFORD, Conn. -- The authority that will be overseeing Connecticut's new Retirement Security Program has its first meeting today.
The 15-member board will guide the launch of the retirement savings program signed into law in 2016. The Retirement Security Program requires businesses with five or more employees and no pension or 401(k) plan to participate in the payroll deduction savings plan.
Employers cannot match employee contributions, and workers can opt out. But according to John Erlingheuser, advocacy director at AARP Connecticut, the plan will help some 600,000 people in the state save for retirement.
"Connecticut has now joined other states - like Maryland, Illinois, Oregon, Washington and California - moving forward in coming up with a solution to the retirement savings crisis that we have here in the United States,” Erlingheuser said.
The program should begin operation next year. Research indicates there is a $7 trillion retirement savings deficit among older Americans nationwide.
AARP sites studies that have shown people are 15 times more likely to save for retirement if they have a payroll deduction plan at work. And, Erlingheuser noted, that will save the state money.
"If people in Connecticut save approximately $1,000 more per year, in the next 20 years or so, we're talking about the state of Connecticut saving over $90 million in public assistance programs,” he said.
Initial funding is from grant money and will be recouped from the vendors providing the private IRA plans. So, Erlingheuser said, the program won't cost the state anything.
He added that creating this program has benefits not only for future retirees, but for all Connecticut taxpayers.
"In this time of fiscal crisis in Connecticut, these are the types of solutions they need to put in place now,” he said, "so that we correct some long-term issues in our budget.”
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