First State seeks to start program to address retirement savings
The State Treasurer’s office is pushing lawmakers to create a new program to help make saving for retirement easier.
State Treasurer Colleen Davis says research shows many Delawareans face what she calls a retirement crisis.
“According to our research and additional research that was done by the National Compensation and Benefits Survey - nearly 54% of Delaware businesses do not offer any form of retirement benefits," said Davis. "That equates to over 200,000 Delaware employees who lack access to an employer-sponsored retirement plan option.”
Davis says House Bill 205 offers a solution, creating the Delaware EARNS (Expanding Access for Retirement and Necessary Savings) program.
“It’s a public-private partnership similar to secure choice programs that have been established in other states," said Davis, "It’s designed to be collaborative and inclusive of the needs of businesses, as well as employees. And really what it does - is we start with an auto enrollment for all employees."
It would provide a convenient, low-cost, portable and tax-favored retirement savings option for workers whose employers do not offer a private-sector 401(k) or other employer-sponsored retirement plan.
Businesses with more than five employees will be required to participate, unless they offer their own retirement option. Delaware EARNS would then automatically enroll employees into the state-facilitated retirement savings plan, though individuals can elect to opt out.
The bill has bipartisan support and currently awaits a House committee hearing.
Davis notes that Delaware is one of only five states that either created or explored the feasibility of a program like Delaware EARNS.