Content starts here
CLOSE ×

Search

AARP AARP States Utah Advocacy

Town Hall Meeting Addresses How to Help Utahns Save for Retirement at Work

Work and Save graph on private-sector workers without access to savings plans



AARP Utah co-sponsored a town hall meeting with the Vest Pocket Business Coalition and the Church and State Business Incubator on November 18 to discuss solutions to the private-sector employee retirement savings problem in Utah, including possibly implementing state-sponsored retirement savings plans through automatic payroll deductions established through legislation.

AARP Utah State Director Alan Ormsby provided an overview of the savings dilemma in Utah using research conducted by AARP in the state; one in six Utahns surveyed age 25-64 have less than $5000 in savings, and over half do not have a way to save for retirement at work.  Research also shows that an individual in over  15 times more likely to save for retirement if the employer offers a savings plan, and the survey conducted in Utah found that 84 percent of those without a plan would take advantage of one if it was offered at work.

Chief Deputy State Treasurer David Damschen outlined how retirement security benefits employers, including the recruitment of good employees (82 percent somewhat or strongly agreed according to a Government Accountability Office report) and fulfilling a sense of responsibility (73 percent somewhat or strongly agreed).  Small business owners are somewhat reluctant to offer savings plans because of the costs and administrative burdens, but a state-run plan could help eliminate some of these concerns.

Senator Todd Weiler, sponsor of   Senate Joint Resolution 9 passed during the last Utah legislative session that created a working group of business, labor, government, and policy organizations to develop a model for saving for retirement through the small business workplace, talked about how all Utahns have a stake in the retirement security problem. Research conducted by the Notalys Group for AARP Utah found that the cost to taxpayers for new retirees will top $3.7 billion over the next 15 years.   If nothing changes, social safety programs are likely to balloon, leaving Utah taxpayers with the bill.  However, the study also found that a ten percent increase in net worth of the one-third least prepared for retirement would save taxpayers $194 million through 2030.

These and other issues were discussed during monthly meetings of the 18-member working group, which includes AARP Utah along with groups such as the AFL-CIO, Fidelity Investments, Georgetown University's Center for Retirement Initiatives, the Utah Bankers Association, and the Salt Lake Small Business Development Center.  The group also examined similar models in the state, such as the Utah Educational Savings Plan and Avenue H., and looked at how to minimize concerns about costs and fiduciary duties, keep costs low, promote participation, and provide incentives for employees.  Also under discussion were the various retirement investment vehicles under consideration and a look at similar legislation in other states (often referred to as "work and save" legislation).

Conclusions reached during the presentations included the following:

  • State should find the best vendor for retirement plans;
  • Facilitate enrollment through an online portal;
  • Make participation voluntary;
  • Make employer contributions voluntary

 

Benefits to a Utah Small Business Retirement Savings Program are that it:

  • Promotes financial freedom and self-reliance;
  • Provides options that are voluntary;
  • Provides employees with control;
  • Helps businesses compete while reducing their administrative burden;
  • Saves taxpayer dollars; and is
  • Self-sustaining

 

Senator Weiler is expected to introduce legislation to create a state-run retirement savings plan in the next legislative session.  Be sure to visit this site for more updates!

 

 

 

About AARP Utah
Contact information and more from your state office. Learn what we are doing to champion social change and help you live your best life.