|By Bill Cummings, Connecticut Post, Bridgeport|
"This increases already burdensome administrative tasks as well as adds a financial burden," said
The plan would be run by a newly created
Companies with five or more employees and without a retirement plan would be required to offer the state program and set up direct-deposit and payroll-contribution systems. Employers would not have to match employee contributions or pay a fee to the state.
"We are in a retirement crisis," said
The bill is modeled after legislation approved by
The target of the initiative is an estimated 740,000
A similar effort last year failed to make it through
While supporters turned out in force Tuesday, it was clear small business owners were not happy with the requirement that they garnish paychecks and divert retirement contributions to the state fund.
"This bill adds administrative burdens and costs on employers, including payroll deductions, enrollment procedures and information and payment transfers," said
"We need to be practical," she said. "We need to stop creating state-run programs that do not operate effectively, efficiently and as profitably as their equivalent private-sector programs."
Workers, on the other hand, saw a need for the plan.
"As a self-employed individual, I would greatly benefit from a plan that didn't have huge fees, didn't make risky investments with my money and was handled by a secure investment board,"
Supporters said younger workers in particular are more motivated to contribute
"Our nation and our state are currently on the brink of a retirement crisis that will not only impact retirees, but next generation workers as well," said House Majority Leader Rep.
An 11-member board, chaired by the state treasurer and comptroller, would administer the trust fund. The program would need tax exempt status from the federal government and be self-sustaining. A trigger is included to cancel the program if it cannot be self-sustaining or gain tax exempt status.
The state would invest the money, with the principal guaranteed.
The return to contributors, who would not make investment choices like with a 401(k), is yet to be determined.
The program is designed have no cost to the state. Administrative expenses could not exceed 1 percent of the fund balance.
Only 52 percent of working-age employees nationwide have access to a retirement plan on the job, the lowest amount since 1979, according to the
"As our citizens approach retirement, far too many of them rely solely on
"Everyone deserves a secure retirement," said
Business owners, however, were not buying into the program.
"This bill is simply unnecessary," said
"It will add administration burdens and costs," she said. "Our employees already have access to a wide variety of retirement planning products and it could create a vast new liability for state taxpayers."
Employers already have costly administrative burdens and "do not need another," said
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|Source:||McClatchy-Tribune Information Services|