Retirement Savings Proposal Would Help Missouri Workers

St. Louis restaurant owner Frazer Cameron wishes he could offer his 35 employees more benefits, including a retirement plan.

“We have a pretty good business, but it’s hard to keep payroll costs down,” he says. “I would love to offer people that. It’s a good way to retain them for a longer period of time.”

Cameron and other small- business owners who don’t currently offer retirement benefits may be able to do just that if AARP Missouri-backed legislation is approved in the upcoming session of the General Assembly. The Show Me More Savings Act would set up a retirement program for businesses with fewer than 50 employees, so workers could have funds automatically deducted from their paychecks. They would be able to take the accounts with them if they switched jobs. 

It could benefit more than 900,000 Missourians who work for small businesses, according to Jay Hardenbrook, AARP Missouri advocacy director. If the bill passes, Missouri would join 16 other states that enacted retirement savings programs, according to Georgetown University’s Center for Retirement Initiatives.

The state treasurer’s office would oversee the fund, as it does for the 529 education savings plan. The program would be optional for both businesses and workers; employers would be able—but not required—to match employee contributions.

The proposal sailed through House and Senate committees this year with no opposition, but the session ended before final passage. Rep. Michael O’Donnell (R-Oakville) is optimistic it will pass next year. He tweaked the bill after talking to officials in states that have similar programs.

The rewritten proposal would allow workers to enroll through voluntary groups, such as the Lions Club, if employers choose not to participate. To attract more investment firms, the legislation would allow Missouri to join other states in getting bids to run the fund, including from companies that handle its 529 plan.

“One of the things I learned is some states had a hard time finding a provider,” O’Donnell says.

The 54-year-old legislator says he wants to give all workers the opportunity he’s had since his early 20s to contribute to a retirement account. That has put him in a much better financial situation than others who didn’t have access, he says. 

“That automatic savings makes it much more likely that you’ll save for retirement,” he says. “If you’ve got to write a check every two weeks, it’s easier to skip a week here or there. I never thought twice about it.”

Proponents optimistic

Hardenbrook notes that workplace retirement savings programs are a nationwide AARP priority, and “we just need to get it moving a little faster.” He worked to build support among local chambers of commerce over the summer and, like O’Donnell, is hopeful the bill will pass this coming year.

“Small businesses are looking for any kind of incentives to attract employees, and this is another way to sweeten the pot,” Hardenbrook says. Another benefit: The program will not have big start-up costs for employers.

That’s important for Cameron, 70, who’s operated Frazer’s Restaurant & Lounge in the Benton Park neighborhood since 1992, growing it from a 25-seat, lunch-only nook to a full-fledged farm-to-table establishment with space for 125 diners. He says one of the biggest challenges will
be to persuade his employees to participate.

Many of those in the restaurant business live “paycheck to paycheck,” Cameron says. “It’s hard to get people to think about the future, even a month ahead.” But he thinks having a program in place to offer them would be a good first step.

Tim Poor is a writer living in Clayton, Missouri.

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