Now, a bill before
the State Legislature would implement a new system to make it easier for the
self-employed and people who work for private employers with no retirement savings
program to save money for age 65 and beyond.
The average
working household in Maine currently has just $2,500 in retirement savings. 235,000
Mainers, or 46 percent of workers age 18 to 64, have no access to a retirement
savings program through an employer, according to AARP.
"For these
workers, each passing second means less time to establish and nurture the
savings that they need for a secure future," says AARP Maine State
Director, Lori Parham.
Parham, along with
a large contingent of AARP Maine volunteers and advocates, recently participated
in a news conference at the State House to press for LD 594, “An Act To Promote
Individual Savings Accounts through a Public-Private Partnership.”
If you are a small business owner and you would like to learn
more about how LD 594 can help your employees save for retirement, please join
AARP Maine on Wednesday, February 5th at noon for a policy briefing.
You’ll learn how to improve retirement security for Mainers and what that means
for small business owners like you. This webinar briefing offers a chance for individuals
to learn more about LD 594 and the opportunity to share your perspective.
Parham will host the event, and you can register for the webinar here.
LD 594 would make
it easy for Maine businesses to offer their employees a way to save for
retirement through payroll deduction. Enrollment
would be automatic unless an employee opted out.
"People tend
to do things that are easy to do. This is an effort to try and make this as
easy as we can," said the bill’s sponsor, State Senate Assistant Majority
Leader Eloise Vitelli (D-Sagadahoc).
A recent AARP
survey of registered Maine voters showed
wide support for a public-private managed state retirement savings option. A
high percentage (86%) agree that elected officials should support legislation
that would make it easier for small businesses to offer employees a way to save
for retirement. The vast majority (84%) of respondents with no current access
to an employer savings plan said it was likely they would take advantage of an
employer- offered savings plan.
Mark Iwry, a
senior fellow at the Brookings Institute who previously worked for the U.S.
Treasury Department, spoke at the State House news conference. He said that while nationally 75 percent of
U.S. employees enroll in retirement savings programs when they are offered, the
rate exceeds 90 percent when enrollment is automatic.
Iwry, Vitelli, and
other bill proponents say this kind of “work and save” fund would be portable
when someone changed jobs: the employee owns it.
Maine State
Treasurer, Henry Beck, who supports the legislation, says increasing seniors’
retirement funds would save the state money down the road. “They can rely on
their savings as opposed to state assistance,” Beck said.
A report released
by the University of Maine showed a cost to Maine taxpayers of close to 3.3
million if we see no change in saving for retirement by 2030.