HARTFORD, CT – Legislation that would increase the default retirement fund contribution rate for workers in the state could come before the Senate today.
The bill, Senate Bill 136, would make several changes to the CT Retirement Savings Program, including raising the contribution rate from 3% to 5% and reducing the amount of days an employee has to work to qualify for the program from 120 to 30.
Sen. Julie Kushner, D-Danbury, said that she has heard no negative feedback from businesses in the state on the bill and that the program could actually represent savings for Connecticut’s workers. AARP Connecticut, among others, also supports the legislation.
The legislation, Kushner said, could represent savings for the state by reducing administrative costs. Having and expanding the state program is a real benefit for small businesses, she said.
“There’s no downside to the bill,” Kushner said in a phone interview.
However, she said the bill was partisan in the Labor committee, and that she expects opposition to the bill from Republicans when it comes to the Senate floor.
The bill outlines some minor penalties for non-compliant businesses, but Kushner said the idea is to encourage participation – not to go after businesses who don’t participate. The penalties would range from $500-$1,500 based on the size of the business.
The legislation gives the state comptroller several powers within the scope of the program, including:
- setting automatic annual increases to the default contribution level;
- investing participants’ contributions in a low-risk capital preservation investment fund for up to 60 days;
- adopting regulations to implement the provisions on a notice requirement and financial penalty for non-compliant employers, and;
- expands the comptroller’s powers in administering the program to allow him to enter into certain contracts and intergovernmental agreements.
State Comptroller Sean Scanlon testified in favor of the bill, and said that the program would grow with the expansion of the business community in Connecticut.
“By passing this bill, we will make important changes to an essential and growing tool that not only secures the financial futures of our enrollees, but also our future as a state,” his testimony read. “Retirement programs like MyCTSavings allow people to retire with dignity, and not need to rely on state services for their survival.”
Kushner said the legislation could be brought before the upper chamber as soon as Wednesday.
