The facts on SB 249 and why lawmakers should reject it
SB 249 requires employers to facilitate access to a government-run retirement savings program for their employees.
Who Does It Impact?
All employers with five or more full- or part-time employees who do not currently offer their employees access to a retirement savings plan.
Why Is SB 249 Bad for Connecticut?
- Makes Connecticut less competitive: Several nationwide surveys already portray CT as a less than desirable place to do business. (CNBC: CT is #45 overall, #43 costliest place to do business.) Becoming the first state to implement this mandate will further that “bad for business” perception.
- Other states are removing mandates and lifting administrative burdens on employers, but this bill adds more: management and costs of additional payroll deductions, payment transfers, dealing with morale issues, and all aspects of employee enrollment and mandated biennial open enrollment periods.
- Establishes a state‐administered retirement program in direct competition with Connecticut’s financial services sector – businesses employing over 100,000 Connecticut residents.
- No other state has such a plan and many have rejected it this year, including AZ, IN, MD, ME, MN, OH, WA, WV, WI. California is extensively studying a similar proposal, but it may never be implemented because of financial and legal concerns.
- Creates a potential liability for state taxpayers by promising a guaranteed rate of return for plan participants.
- Acknowledges the program will not be self‐sustaining on launch date and that expenses needed to run the program may exceed the administrative cost allowance.
Bottom Line: SB 249 will make Connecticut less competitive with other states, make it harder to operate a business here, and put jobs in jeopardy by placing state government in direct competition with our excellent private-sector financial services industry.