It only took five years and a marathon debate session, but Connecticut’s House of Representatives has approved a state-run retirement program for private sector workers in the Nutmeg State.
The so-called “retirement for all'” bill passed April 26 after a marathon debate on the House floor that lasted until nearly 3:00 a.m., according to the Hartford Courant. The final vote was 76 to 63, with 11 members absent, following a debate that lasted about 6-1/2 hours.
Under the bill, employees who are at least 19, make at least $5,000 a year and work for companies that employ five or more workers and don’t offer a retirement plan would automatically be enrolled in the state-run plan (a Roth IRA) at a default rate of 3%, according to the Connecticut Post.
The bill now heads to the state Senate, where it faces a May 4 adjournment deadline. If it is approved by the Senate and signed into law by the governor, a new quasi-public agency called the Connecticut Retirement Security Authority would be created, with a nine-member board to administer the program.
Start-up costs for the program have been estimated at $500,000 to $1 million, which would mean that it could be financially self-sustaining three to four years after it begins, although the 3% default rate could extend that, as might the enrollment response (or lack thereof).
