HARTFORD, Conn. (WTNH) — Republicans assembled business leaders and financial planners Thursday to protest a plan from Democrats to have the state sponsor an IRA type retirement savings program that would operate at no cost to employers.
Some estimates place the number of Connecticut workers with no retirement plan other than Social Security between 600,000 and 700,000. And more than 40 percent of people between 25 and 44 are not enrolled in any kind of employer-provided retirement plan.
But opponents say the proposal is just not needed and it would compete with the private sector.
“What business wouldn’t be afraid of competing with the people who make the rules of the game?” said financial planner Mike Leone.
“Right now for a sum of $50 per year at banks and financial institutions these employees in question can open an IRA using payroll deductions,” said Hope Feller, another financial planner.
“Reality is only 30 to 40 percent of the people are taking advantage of it,” said state Rep. Joe Aresimowicz, a Democrat.
The AARP is lobbying heavily in favor of the plan with big ads in print and online. Says its associate state director, John Erlingheuser, “The only thing this does is require that the state provide 600,000 people with no retirement savings an option through a payroll deduction.”
“When we were looking at this plan and talked about the components that were important; it had to be portable, had to be through payroll deductions and that’s why we put in ‘opt out’ instead of ‘opt in,’” said Aresimowicz.
That means that if your employer decided to take part in this program, you would have to decide if you did not want it. Otherwise, savings from your paycheck would start being withheld for retirement.
The governor’s office says they understand the intention of this proposal but are still in consultation with Democratic leaders on whether or not to proceed with this plan if it passes.