Connecticut Employers Don't Want State Help With Retirement Plans | Connecticut Public Radio
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Connecticut Employers Don't Want State Help With Retirement Plans

Feb 10, 2016

Lembo is proposing that the state create its own universal IRA system.
State Comptroller Kevin Limbo co-chairs the Retirement Security Board with Treasurer Denise Nappier.
Credit Chion Wolf / WNPR

About half of Connecticut businesses oppose the idea of the state getting further into the retirement business. That’s the finding of a survey commissioned by the Connecticut Retirement Security Board. 

The Retirement Security Board was created to address one very stark fact -- almost a third of Connecticut retirees have no savings. Only about half of private sector employees are able to sign up for a retirement plan through their work, and the majority of those who can’t don’t take action on their own.   

For State Comptroller Kevin Lembo, that represents a huge issue for the state in the future.

"An inevitable tide, and perhaps worse, hitting state and federal government," Lembo told a legislative hearing, "when those who are unprepared for retirement come back to state and federal government for assistance with food stamps, housing assistance, healthcare assistance, and the like."

That’s why he’s proposing that the state create its own universal IRA system, which private sector employers could offer if they don’t have their own plan. A survey of workers showed about 80 percent like the idea, but their companies are less enthusiastic -- about 48 percent of those questioned were against the idea, partly because they don’t believe any state run plan will be a success.

Researcher Geoffrey Sanzenbacher from Boston College outlined the findings. "The employers are skeptical of an employer mandate, and they tend to view auto-enrollment as forced retirement savings," Sanzenbacher told lawmakers. "So making the program really easy for employers, and emphasizing that it's completely voluntary for employees, is going to be really important in terms of framing this for employers."

The idea is not yet a bill, but its backers hope to see action in the legislature soon.