Mass. Legislators Debate A Bill To Expand Access To Retirement Plans

BOSTON -- More than 1 million people in Massachusetts lack access to a retirement savings plan through their employer, according to backers of a bill aimed at making easier for those workers to prepare for their futures.

AARP Massachusetts on Tuesday released a survey of 600 registered voters, finding that 70% were very or somewhat anxious about having enough money to live comfortably through their retirement years, and 89% wished they had more money saved for retirement.

"Inaction is the biggest problem," the AARP's Sarah Gill said at a Statehouse briefing. "Can people go out on their own today to a bank account and open an IRA? Absolutely. But what we know is, they won't."

The AARP backs a bill that would expand an existing state program that makes retirement plans available to nonprofit workers and create a new "Massachusetts Secure Choice Retirement Program." Most businesses would then be required to enroll workers in their own sponsored retirement plan, the new Secure Choice program or an expanded existing program or face a $250 per employee fine.

According to Sen. Patricia Jehlen, the bill would "allow all employees to have the opportunity for an opt-out program for participating in a retirement program." The bill language lists "covered employees" as anyone over 18 with wages allocable to the state, excluding federal, state and municipal employees and those who work for companies with multi-employer pension trust funds.

AARP Massachusetts President Sandra Harris described the Secure Choice Program, which would let retirement savings be drawn from a worker's regular paycheck, as an "easy stress-free way to grow retirement savings so you can take control of your future."

Gill said about half of all private sector employees in Massachusetts, or roughly 1.25 million people, lack a way to save for retirement out of their regular paycheck. Those who can contribute to their retirement from their paycheck are 15 times more likely to save, and that number shoots up to 20 times more likely if uninterested workers have to opt out of the program instead of interested ones opting in.

The bill (H 1075, S 602) is sponsored by Rep. Tram Nguyen and Elder Affairs Committee Co-Chair Jehlen. It had a hearing Tuesday before Financial Services Committee.

Jehlen said economic security is the "single biggest issue" for seniors.

"Everything else is related to that -- health care, housing, food," the Somerville Democrat said.

The bill proposes to make the the Connecting Organizations to Retirement (CORE) plan available to all employers.

Treasurer Deborah Goldberg's office launched the CORE PLAN in 2017 to make 401(k) plans available to workers at nonprofits with 20 or fewer employees. In April, Goldberg's office said 51 nonprofit employers had adopted the CORE plan and efforts were underway to open up the program by uncapping the 20-employee limit.

National Federation of Independent Business Massachusetts Director Christopher Carlozzi opposed the bill, saying in his testimony at Tuesday's hearing that the state should instead seek private-sector solutions to problems with accessing retirement plans.

"One of the barriers to small business owner support for retirement savings programs is the high cost of doing business in Massachusetts," Carlozzi said. "With the costs for health insurance, taxes, mandated leave benefits, energy and unemployment insurance higher in the Commonwealth than in most other states, the available resources of small business owners for support of employee retirement savings are diminished."

Chris Lisinski contributed reporting.

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