Make NJ companies help workers save for retirement, legislators say
Does your company do enough to help you save for retirement?
There’s a big push in the New Jersey Legislature to require companies with 25 workers or more to set up individual retirement accounts for employees. The workers who would have money deducted from their paychecks if they opt in to the program.
“We face a grave retirement crisis here in New Jersey,” said Jerome Montes, a business representative with the NJ Main Street Alliance. “Nearly 1.7 million workers do not have access to a workplace retirement plan.”
Supporters said it's critically needed, but those opposed complain that it would be a costly mandate for companies, which could also be exposed to legal action.
Monday, the State Senate Labor Committee approved a bill (S-2831) called the New Jersey Secure Savings Program Act, cosponsored by Sen. President Steve Sweeney (D-Thorofare). The measure has several secondary sponsors including three Republican senators.
Under the legislation, companies would be required to offer professionally managed plans. The program would be overseen by a seven-member Secure Choice Savings Board.
During and after the Monday hearing, several from the business community voiced concern that companies could be sued under a federal law if the retirement plans lose money. They weren’t thrilled about being forced to offer the programs either.
“We’re just concerned that this is another mandate that in fact is going to cost employers money to set up these plans. If we make it voluntary they can set up plans with their employees if they feel they can afford it,” said Frank Robinson, vice president with the New Jersey Business and Industry Assoc.
Mike Egenton Sr., vice president with the New Jersey Chamber of Commerce, said he was glad lawmakers were working to address retirement savings — and if it was voluntary his group would probably be receptive to it.
The National Institute on Retirement Security has reported roughly 55 percent of private sector workers do not have access to retirement savings plans at work.
“The Secure Choice plan will give employees the ability to save and invest for their retirement,” Sweeney said in a statement issued after the bill made it through committee. “The voluntary program will be convenient, low-cost and portable, so that employees can take it with them if they change jobs. It will make use of professional investors but it won’t cost the taxpayers anything because it is self-sustaining.”
The legislation was released by the panel with a vote of 3-0 and now goes to the Senate Budget and Appropriations Committee.
Kevin McArdle has covered the State House for New Jersey 101.5 news since 2002. Contact him at firstname.lastname@example.org. Follow him on twitter at @kevinmcardle1.