Secure Choice: Your Questions Answered

Senate 2045 Sponsored by Chairman Evan P. Shanley
House 7127 Sponsored by Senator Meghan Kallman

Why is Secure Choice a top priority for AARP Rhode Island?

AARP's mission is to empower people to choose how we live as we age. Financial security makes it possible to have choices and retirement savings are an essential component of financial security.

What is Secure Choice?
 
Secure Choice is a portable, voluntary retirement savings program that will be accessible to over 172,000 private sector employees in Rhode Island.

Why is This Important?

• Forty percent of Rhode Island private sector employees do not have access to retirement savings vehicles through their employer. 
• Americans are 15 times more likely to save for retirement when they can do so at work and are 20 times more likely to save if doing so is automatic.
• By 2032, the program could save Rhode Island taxpayers more than $25 million simply by helping people save their own money for retirement.
• According to an AARP RI survey, three quarters of Rhode Island small business agree that voluntary, portable retirement savings are helpful in recruitment and retention of local small business employees.

More FAQs

• What type of savings program is Secure Choice?
  
  • Secure Choice is an automatic IRA (individual retirement account) program overseen by the state, with investments run by the private sector.
• Who qualifies for this program?
  
  • Under Secure Choice, all private sector employees of employers who do not have access through their employers with 5+ employees (who do not already offer a way to save for retirement at work) are eligible to enroll into a portable, voluntary Auto IRA-type retirement program.
• What happens if an employee changes jobs?
  
  • The benefit is portable, meaning that it will stay with the employee, even if they change employers.
• Is employee participation in the program required?
  
  • Employee participation is completely voluntary, and any eligible employee may elect to opt out of the program or change their investments or contribution rate at any time.
• What is cost of the program for employers?
  
  • Secure Choice is designed to be no cost and liability free for businesses.
• What is the cost for the state?
  
  • This program will be self-sustaining, and participant-funded. After the initial start-up, costs are paid back to the state.
• Who benefits from a Secure Choice program?
  
  • Workers who are able to build their own retirement security.
  • Businesses that will stay competitive in today’s tight job market by offering access to an important retirement savings option.
  • Taxpayers who will save money as fewer people will be reliant on public assistance programs in retirement.
• Do employers have to facilitate this State program?
  
  • Yes, any business with 5 or more employees in Rhode Island would facilitate the State’s program for its employees, unless it already offers a qualified, employer-sponsored retirement plan.
• What is required of employers to facilitate Secure Choice?
  
  • As part of the registration process, you would provide a list of your employees and your payroll information. You would need to update your participating employees’ contribution rates within your employer portal to ensure accurate payroll deductions. From that point on, you will just need to keep your employees’ payroll contribution rates and staff list up to date.
• Can I have a designated employee or payroll services provider complete the onboarding process?
  
  • Yes. You could elect to add “teammates” to your account to help facilitate the Secure Choice program if you choose not to do it yourself. This could be an authorized employee or even staff from your payroll provider.
• What if I already offer a qualified retirement plan?
  
  • Employers that offer a qualified retirement plan are exempt from facilitating the program.
• Are my employees who live in other states eligible for Rhode Island’s program?
  
  • Yes, if their employment is based in Rhode Island.
• Can employers match employee contributions?
  
  • No, Secure Choice does not allow employer contributions. An employer’s role is limited to facilitating the program for your employees
• Can employers cancel their employer-sponsored retirement plans and offer this instead?
  
  • Rhode Island's program isn't intended to replace employer-sponsored retirement plans, which have many important benefits. For example, 401(k) plans have higher employee contribution limits and allow for employer matching contributions, unlike Secure Choice.
• Do other states have programs like this?
  Yes, similar programs are up and running in other states, including California, Connecticut, Oregon, Colorado, New Mexico, and Illinois. And many other states are about to launch state-sponsored retirement savings programs or are in the process of passing legislation to support them.
• Is this related to the Rhode Island Public Employees Retirement System?
  
  • No. This program is not related in any way and is not a pension plan. Secure Choice is for private sector employees to save their own money in their own individual accounts.

Other questions? Contact Matthew Netto.

Tucker, Jeannie - JTTucker