By the slimmest of margins, the state of Connecticut recently approved a bill establishing a state-run retirement plan for private sector workers.
Here is how it would work. Employers with at least five employees that do not currently offer a workplace retirement plan would be required to set up an automatic payroll contribution plan for their employees. All employees who are at least 19 and who earn at least $19,000 per annum would be automatically enrolled, once they have been employed for 120 days.
The payroll deferral deduction would be 3% of their salary. The contributions would be invested in a ROTH IRA. That means that the workers would be deferring after-tax dollars into the program. It also means that since their deferrals come from after-tax money, neither the Federal government nor the State of Connecticut would experience a loss of tax revenue.
Employees could choose to opt out. Or, they could also choose to increase their deferral rate. Right now, there is...
Sign up to download The State of Connecticut Is Ready To Enter The Retirement Plan Business - And That Is A Good Thing
