Lagana, Singleton Retirement Savings Plan Advances
‘Secure Choice’ Would Provide Private Sector Employees Means for Retirement Security
TRENTON – Private sector employees would be provided a means to save for retirement under terms of legislation sponsored by Senator Joseph Lagana and Senator Troy Singleton that was approved by a the Senate Labor Committee today.
The bill, S-2891, would create the Secure Choice retirement program so that workers without employer-sponsored retirement plans are given the ability to prepare for financial security in retirement.
“The New Jersey Secure Savings Program Act is a low-cost option that will provide workers with the resources they need to save for their retirement in a convenient and efficient way,” said Senator Lagana (D-Bergen/Passaic). “By ensuring that our residents have an alternative program to secure their savings, private sector workers can breathe easier knowing they have access to retirement benefits, ensuring a better future for themselves and their families.”
Employees who work for businesses with 25 or more employees would be automatically enrolled in a professionally-managed plan unless they choose to opt out. The program would be overseen by a seven-member Secure Choice Savings Board, with members appointed by the governor, the Senate President and Assembly Speaker. The savings fund would be outside and apart from other state funds. Neither employers nor the state would have any liability for, or claim to, the fund.
“The majority of American workers in the private sector do not have access to an employer-sponsored retirement plan, and this is especially true for low-wage workers,” said Senator Singleton (D-Burlington). “Retirement savings should be accessible, regardless of the industry you work in or the wages you earn. Individuals should not have to work their entire lives only to live in poverty when they retire.”
The savings program would allow employees the opportunity to establish individual retirement accounts, allowing them to make contributions via automatic payroll deductions facilitated by their employers. The program would be targeted to the growing number of businesses that don’t provide retirement plans for their employees.
According to AARP, half of US households are at risk of financial insecurity in retirement and approximately 1.7 million people in New Jersey don’t have a means to save for retirement at their jobs.
In the 2014-2015 legislative session, the proposal had the support of the AARP, AFL-CIO, CWA local 1032, NJ Citizen Action, NJ Mainstreet Alliance, the African American Chamber of Commerce of NJ, the Hispanic Chamber of Commerce, the Asian-Indian Chamber of Commerce, the Anti-Poverty Network, Catholic Charities, Diocese of Trenton, the Jewish Federation, NJ Working Families, the Employers Assoc. of NJ and NOW, among others.
The legislation was released from committee with a vote of 4-0-1, and next goes to the Senate Budget & Appropriations Committee for further consideration.