Proposed legislation offers small business workers the ability to save for retirement.
State Treasurer Michael L. Fitzgerald and State Senator Nate Boulton announced a legislative initiative to combat the looming retirement crisis in America. “All Iowans, regardless of industry or education, deserve the chance to save for a prosperous future,” Fitzgerald said. “My office is introducing a practical, common-sense plan that offers Iowa’s small business workers the ability to easily and conveniently save for their retirement needs.”
Studies have repeatedly shown that Americans are not saving enough for retirement. In Iowa, the AARP Public Policy Institute found that 42% of private sector employees do not have access to employer sponsored retirement savings plans.
Under the proposed legislation, Retirement Savings Iowa would be offered to private sector workers through their employers. Created as a public trust managed by the state, the state treasurer’s office would serve as its trustee. This proposal will require all businesses that don’t currently provide a retirement savings plan to give employees the opportunity to automatically invest a percentage of their paycheck in a Roth IRA. Employees will determine the amount they would like to contribute, and can opt out at any time. Under current federal regulations, employers would not be allowed to contribute to the account.
“This plan is good for everyone involved,” Fitzgerald stated. “Retirement Savings Iowa allows private employees without employer-sponsored plans to save for retirement, while removing many of the complexities and costs small business owners face when setting up and maintaining plans. Our state is also stronger when more Iowans have professionally managed plans for retirement.”
Treasurer Fitzgerald was joined by Senator Nate Boulton, D-Des Moines, in announcing the plan. “Last session, we didn’t see much leadership on improving Iowa workers' quality of life. This year, we have the opportunity to pass bills like this one, to help working families in their pursuit of economic security for their futures. Not only should we protect and strengthen IPERS, but we should expand opportunities for Iowans to safely invest in their retirements to receive benefits to support them after their years of work to support Iowa’s economy,” said Boulton.
“Through the creation of College Savings Iowa, and our involvement in retirement funds such as IPERS, we have led the way in helping Iowans responsibly save billions of dollars for the big moments in their life,” Fitzgerald said. “Retirement Savings Iowa is a responsible, low cost way for the state to address a looming retirement crisis. Providing an opportunity for all employees in Iowa to save for retirement will lead to more retirement planning and a decrease in the number of households struggling for financial security in retirement.”