Legislators want to create a state-sponsored retirement plan for private sector workers in Connecticut. A bill before lawmakers would task the state treasurer with administering a low-cost plan that residents could pay into.
"These people suffer a tremendous fall off a cliff when they retire, and see a drastic reduction in their income."
State Sen. Martin Looney
Senate Majority Leader Martin Looney said this is a vital issue because more than half a million people in Connecticut have no plan for retirement. "Many people in Connecticut and throughout the country are now having to rely almost exclusively, and in some cases exclusively, on social security in their retirement," he told a news conference. "They don’t have traditional retirement plans; they don’t have IRAs; they don’t have other retirement savings; so these people suffer a tremendous fall off a cliff when they retire, and see a drastic reduction in their income.”
California is the only other state that's currently running such a plan.
The bill's sponsors said it's simply a recognition that an aging population that's also living longer will put additional strain on public programs if people don't begin to save.
House Majority Leader Joe Aresimowicz said it’s important to make it easy to save. "What we’re saying is," he said, "let the state of Connecticut provide this product, let it provide it on a low administrative cost, let it provide it right through the payroll deductions, and educate our residents how important retirement savings is."
Some insurance groups and financial advisers have opposed the bill, saying it puts private retirement plans in direct competition with the state.
Watch the archived news briefing footage from CT-N:
