STATE HOUSE — State Rep. Evan P. Shanley (D-Dist. 24, Warwick, East Greenwich), has introduced a bill establishing a voluntary state retirement savings plan with deductions from Rhode Islanders’ paychecks into a low-cost voluntary retirement savings plan for Rhode Islanders.
The Rhode Island Secure Choice Retirement Savings Program (2024-H 7121), which would be administered by the office of the General Treasurer, would see retirement savings accumulated in individual accounts for the exclusive benefit of the participants or their beneficiaries, according to the Legislative Press and Public Information Bureau. The bill would see no fiscal impact on the state budget.
“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 Representative Shanley. “This program would 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 bill gives them a way to support their workers and gives workers a chance to save.”
Under the legislation, the General Treasurer would be charged with collecting contributions through payroll deductions and investing the funds in accordance with best practice for retirement savings vehicles. The General Treasurer would also be responsible for setting minimum and maximum contribution levels in accordance with contribution limits set for IRAs by the Internal Revenue Code. The act would become effective for all eligible employers within 36 months of the opening of the program enrollment following a phased implementation period.
Several other states, including neighboring Connecticut, have already established secure choice programs and others are currently establishing them. Among the biggest beneficiaries are small businesses and their employees. Approximately 70% of workers at companies with fewer than ten employees have no access to retirement savings through work.
The legislation has been referred to the House Finance Committee. A similar measure (2024-S 2045) has been introduced in the Senate by Sen. Meghan E. Kallman (D-Dist. 15, Pawtucket, Providence).
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