The federal government has been throwing around ideas lately to create a publicly run retirement system that would cover private sector workers who don’t have access to retirement plans through their employers.
But states, including California, Illinois, Indiana, Minnesota and a dozen others, are developing and implanting similar ideas, as well. A breakdown of some of these programs from Investopedia:
California is looking to enact a plan that is still awaiting approval from the Internal Revenue Service. The law allows for the introduction of a retirement savings plan for the employees of small non-profit organizations. The plan would offer several investment options to its participants and allows for contributions to be made by employees or employers. (For more, see: Retirement Planning: An Introduction.)
Also in 2012, California’s governor Jerry Brown signed into law the California Secure Choice Retirement Savings Trust Act. The law allows for the launching of individual retirement accounts for employees who work at businesses that do not offer them a plan. The plan calls for employees to be automatically enrolled in the plan through a payroll deduction of 3%, while also giving them the option to opt out of the plan.
In Indiana:
State Senator Greg Walker introduced a bill that would establish a retirement savings plan for state workers who don’t have access to one. The bill is currently pending in the state’s Senate Tax and Fiscal Committee. Indiana Retirement Savings Board would run the program, and the plan, which includes a tax credit of up to $250 for participants, would allow both employees and employers to take part in the plan.
And in Minnesota:
The Minnesota Secure Choice Retirement Savings Plan Establishment was introduced by State Senator Sandra Pappas earlier this year. The bill requires the state to develop a retirement-savings program for state private-sector employees who work at companies that don’t offer them. Approved by two Senate committees, the bill is now awaiting action in a third one.
The Investopedia article also covers similar legislation in Illinois and West Virginia.
Photo by 401kcalculator.org