(May 12, 2014) — The Connecticut General Assembly has approved a bill to create and fund the Connecticut Retirement Security Board, a group tasked with studying the feasibility of a public-run savings system for private-sector employees.
The system’s foremost goal, according to the legislation, would be to increase participation in quality retirement plans without adding to the state’s debts or liabilities.
The defined contribution plan would be designed to require minimal financial knowledge from participants, and to incur “low administrative costs…limited to an annual, predetermined percentage of the total plan balance.”
A successful scheme would reduce the need for public assistance by offering workers a structure in which to pre-fund their own retirements, according to the law.
“This is an incredible moment as Connecticut has just catapulted into the national lead on this critical issue for working families,” said Sal Luciano, executive director of Council 4 of the American Federation of State, County & Municipal Employees—the state’s largest public employee union. “By laying the groundwork for a public retirement savings option for all private-sector workers, Connecticut is making a serious, first-in-the-nation investment with the aim of developing an optimal plan for our state that will ensure the greatest possible return on workers’ savings.
Board members are to be appointed by the state comptroller, treasurer, governor, and leaders from the house of representatives and senate by July 31. Their feasibility study is due January 1, 2016.
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