Let States Lead on Retirement Savings

Today, a secure retirement is out of reach for millions of Americans and nearly 800, 000 working Kentuckians. The issue is 55 million Americans don’t have a way to save for retirement at work, even though people are 15 times more likely to save if they can put money aside directly from their regular paycheck.

Those who do not save enough for retirement risk becoming dependent on social safety net programs down the line. In fact, states taking action today could save taxpayers as much as $4.8 billion in the next ten years.

States are innovating to solve this problem by removing the regulatory and operational barriers for small businesses that want to offer their workers a way to save for retirement. The solution: setting up public private partnerships that work like a 529 college savings plan for retirement, known as Secure Choice or Work and Save.

A 2016 Department of Labor rule provides guidance on how states can do this. The rule is clear: small business owners do not operate these plans. Their only interaction is to provide information to employees and run the payroll deduction, which they are already doing to remit taxes.

Earlier this year, the U.S. House passed H.J. Resolutions 66 and 67, repealing the Department of Labor guidelines. Now the U.S. Senate is close to a vote on H.J. Res. 66. AARP with a broad group of bipartisan state lawmakers (and Kentucky State Treasurer Allison Ball) oppose H.J. Res. 66.

This represents significant overreach by the federal government. AARP believes Congress should not block States from innovating solutions to the retirement crisis.

We urge Congress to listen to the voters and oppose H.J. Res. 66: eight in ten private sector employees across party lines agree elected officials should do more to make it easier for small businesses to provide retirement plans to their employees. When H.J. Res. 66 is voted on in the Senate, AARP Kentucky urges Senators to oppose H.J. Res. 66.

It’s time for the Senate to protect state flexibility on retirement savings programs by opposing H.J. Resolution 66 for small businesses and their employees.

Charlotte Whittaker is the volunteer AARP Kentucky State President representing the state’s 470,000 AARP members. She is a long-time advocate for Kentuckians 50+ and former Executive Director of the Ohio County Senior Center in Hartford, Kentucky.