State Should Follow Others’ Lead in Rejecting Retirement Plan Mandate

04.04.2014
Issues & Policies

Measures that could seriously undermine Connecticut’s business competitiveness should be rejected by state lawmakers—especially when other states have considered and discarded similar proposals.

SB 249 requires any business, with five or more employees, that does not currently offer employees access to an IRA, 401(k) or pension plan, would have to facilitate employee access to a newly created government-run retirement plan.

If enacted, the government retirement plan created by SB 249 also would directly compete with private sector financial services businesses that employ 100,000 people in the state and offer a multitude of low cost, readily available retirement plan options.

This year alone, Arizona, Indiana, Maine, Minnesota, Ohio, Washington, West Virginia and Wisconsin all rejected legislation similar to SB 249. California is conducting an expensive, multi-year study of the proposal and may never enact it. 

Not only is SB 249 costly to businesses, but the nonpartisan Office of Fiscal Analysis estimates SB 249 could cost taxpayers $10 million in start up costs, plus up to $165.2 million dollars each year thereafter in lost income tax revenue.

Under the plan, employees would be automatically opted into the program unless they expressly opted out every two years. While the goal of this proposal is to encourage more people to save for their retirements, it places that responsibility, in large part, onto businesses.

SB 249 also requires employers to incur the expense and burden of employee payroll deductions, transferring payments, hosting periodic open enrollments, and other administrative duties. 

A coalition of more than 40 Connecticut business organizations, including CBIA, are opposing this measure. We encourage state lawmakers to reject SB 249 as too costly for our economy and for our taxpayers.

For more information, contact CBIA’s Eric Gjede at 860.244.1931 | eric.gjede@cbia.com | @egjede

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