April 30, 2016
The Connecticut House just passed a bill to mandate that employers who don’t have retirement plans for their workers participate in a new state-sponsored plan, essentially a public IRA, which gives workers the option of saving for retirement. The Senate should pass the bill and Gov. Dannel P. Malloy should sign it, but without illusions about what it will accomplish.
Opponents of the bill, including the Connecticut Business & Industry Association, say that the private sector provides sufficient retirement savings plans. The bill’s proponents counter with the undeniable statistic that half of Connecticut workers have no retirement plan and will be completely dependent on Social Security, which provides only a fraction of necessary retirement income. They imply that the new plan would make up the gap, solving the retirement crisis.
Neither side is right. We wouldn’t have a growing retirement crisis if private plans had been sufficient, and the public approach under this bill, HB 5591, while useful, will not be nearly enough to allow participants to retire with sufficient income.
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