Retirement Plan Mandate Passes, Just Barely
A last-second compromise and a tie-breaking vote from Lt. Gov. Nancy Wyman enabled the retirement savings plan mandate (HB 5591) to pass the Senate last weekend.
HB 5591 was widely criticized by Connecticut businesses and others because it was a bad deal for employees on top of being a new administrative burden for employers.
Rumors that Governor Dannel Malloy might veto the bill if passed in the Senate began to circulate late last week.
Republicans filibustered the bill for several hours during the Senate debate.
However, the filibuster ended once the Governor signaled he would sign the bill if changes were made.
Overall, the mandate to automatically enroll employees into a retirement savings program survived the last-minute compromise.
Businesses with five or more employees will be required to enroll any full- or part-time employee not eligible to participate in an employer-sponsored plan into a retirement savings plan.
Currently, this plan is to be a single plan chosen by the state. However, as a condition of passage, the governor and Democratic leadership agreed that modifying language will be needed to provide multiple private sector plan options.
In a session that followed the outcry over Connecticut’s anti-business climate, HB 5591 makes it clear state lawmakers have not yet taken heed.
After the modifications are made, participants will be able to enroll in any one of a multitude of state-approved plans from an online exchange.
Employers will be responsible for making payroll deductions and sending employee contributions to the plan administrators.
They will also be subject to penalties for failing to do this on a timely basis.
The modifications to HB 5591 are expected to be incorporated into the budget implementer bill when the General Assembly meets in special session on May 12.
The business community and allies fought an uphill battle against HB 5591 as powerful legislators and national lobbying groups wielded their influence to push for passage.
In a session that followed widespread outcry over Connecticut’s anti-business climate—including fondness for first-in-the-nation workplace mandates—HB 5591 makes it clear Connecticut state lawmakers have not yet taken heed.
For more information, contact CBIA’s Eric Gjede (860.244.1931) | @egjede
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