RI Private Retirement Plan Law Takes Effect

STATE HOUSE — Gov. Dan McKee signed Rep. Evan P. Shanley’s (D-Dist. 24, Warwick, East Greenwich),   voluntary private retirement plan bill into law Sept. 5.

The Rhode Island Secure Choice Retirement Savings Program (2024-H 7121) will be administered by the office of the General Treasurer.

Private employers who do not currently offer a retirement plan will be required to provide access to the Secure Choice private retirement plan program. Enrollment for employers will be free, and employees will be automatically enrolled but can opt out at any time. Employees will own their savings, decide their contribution amounts through automatic payroll deductions, and can carry their savings with them as they change jobs.

The private retirement plan has no fiscal impact on the state budget.

The law allows individual Rhode Islanders to make deductions from paychecks into a low-cost retirement savings plan, for the exclusive benefit of the participants or their beneficiaries. The program is aimed at helping employees in the private sector who may not have access to employer-sponsored retirement plans, like 401(k) plans, to save for retirement.

 

The need for a private retirement plan

“While most Rhode Islanders save for retirement through pensions or a 401(k), there are many who don’t have access to these retirement plans, and we’re seeing a retirement savings crisis across the country,” said Shanley.

“This program will allow workers to contribute a portion of their salary to individual savings accounts through payroll deductions, at no cost to their employers. When I talk to small businesses in my community, they really care about their staff and want their workers to be able to save for retirement. But small business owners can’t be experts in everything and often don’t know where to start with offering retirement savings. This law gives them a way to support their workers and gives workers a chance to save,” Shanley said.

“Secure Choice is a convenient, portable, voluntary IRA managed by the state that will work directly through workers’ jobs — essentially a public-option IRA for those whose employers do not offer one,  said private retirement plan co-sponsor Senator Kallman (D-Dist. 15, Pawtucket, Providence).

This legislation was championed by Treasurer Diossa and backed by Governor McKee who called for its passage in his State of the State address earlier this year.

“As our Administration works to raise incomes for all Rhode Islanders, it’s a no-brainer that we would establish the Secure Choice program that will ensure access to retirement savings plans and set our residents up for long-term financial success,” said Governor Dan McKee. “I commend Treasurer Diossa for making Secure Choice a top priority this legislative session and I thank the bill sponsors for their dedication to the financial security of all Rhode Islanders.”

“Secure Choice will transform retirement in our state and help the 40% of Rhode Island private sector employees with little or no retirement savings prepare for a comfortable, dignified life after work,” said General Treasurer James A. Diossa.

“The Office of Healthy Aging’s mission is to help older Rhode Islanders and adults living with disabilities to age healthfully, happily and safely. We believe that everyone deserves the right to age well, and economic security allows older adults to access resources to afford the necessities of life – like affordable housing, healthy foods, and adequate health care,” said Maria E. Cimini, director of the Office of Healthy Aging. “Providing Rhode Islanders with the opportunity to plan and save for their retirement years, regardless of their place of employment, enables more of our friends, family and neighbors to thrive as they age.”