Working Class Retirement Savings Plan Proposed by State Treasurer, Lawmakers |
Harrisburg, PA – Treasurer Stacy Garrity, Rep. Tracy Pennycuick and Rep. Michael Driscoll will soon introduce a bill to create Keystone Saves, a retirement savings program for working Pennsylvanians who do not have access to retirement savings through their employer.
During the announcement, they were joined by supporters from the General Assembly and representatives from AARP, United Way of Pennsylvania, the Pennsylvania Health Care Association and the Pennsylvania Association of Sustainable Agriculture. Other Keystone Saves supporters include The Pew Charitable Trusts and the Pennsylvania Institute of CPAs.
âMore than two million Pennsylvanians do not have access to retirement savings plans through their work, âTreasurer Garrity said. âWe’re talking about people we all know – hairdressers and barbers, truckers and mechanics, our favorite waitresses and bartenders. They work hard every day with no easy way to save for their family’s future. Keystone Saves is a simple, efficient, and user-friendly way for businesses to help them save more. It is tackling a problem that we absolutely must solve.
More than two million working Pennsylvanians currently do not have access to retirement savings in the workplace. Keystone Saves would save more Pennsylvanians, as people are 15 times more likely to save when given the opportunity to do so at work.
Accounts created under Keystone Saves will be owned by the employee and will be transferable, so that they can use their account for a new job and continue to save. Employees will be able to opt out of the program at any time.
Representatives and executives behind the proposal commented on its long-term impact on employees and the state.
âPeople everywhere are very nervous about the economy, and that’s understandable,â said Representative Pennycuick. âThe pandemic has revealed how many people are just not prepared for retirement. Keystone Saves will give people a real opportunity to save for the future. This is a common sense approach to helping hard-working Pennsylvanians prepare for the future. “
“Retirement safety is a big issue, âsaid representative Driscoll. âHere in Pennsylvania, 44% of our workers do not have defined benefits. program or an IRA in the places where they work. And we have the ability to change that with Keystone Saves. Pennsylvania is facing what some are calling the âSilver Tsunami,â so ignoring this issue is just not an option. Failure to address this problem would have devastating effects on future retirees and the financial well-being of the state as a whole. “
âThe benefits of Keystone Saves are manifold,â said John Scott, Director of The Pew Charitable Trusts Retirement Savings Project. âThe program will create a simple mechanism to help workers secure their financial future while allowing businesses to provide a benefit at no cost. It will also help address a looming budget crisis: Unless Pennsylvania households save more, state taxpayers will need to fund about $ 14.3 billion over the next 15 years for household welfare. older people who have insufficient retirement savings. A household that starts saving as little as $ 25 per week in Keystone Saves can help erase that tax impact on the state.
Keystone Saves was designed to be business friendly. Employers simply provide an employee census and withhold payroll for each employee who participates. All other administrative and core functions will be handled by the Treasury and a private sector third-party provider, much like PA 529 College and Career Savings Program.
Keystone Saves protects employers from liability issues and removes high start-up costs and complicated investment decisions that prevent many employers from providing retirement advantages.
Keystone Saves will be phased in over four years. The first two years are reserved for the Treasury to set up the program, including a competitive bidding process, and to implement a voluntary pilot project. Employers with fewer than five employees and those who have been in business for less than 15 months are excluded from Keystone Saves, as are employers who have already established retirement savings plans.
House Bill 2156, sponsored by Representative Pennycuick, will be presented in the coming weeks. Ten other states have enacted similar legislation.
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