Let All Save
I believe that personal capital fuels one’s passion to accomplish their goals. I believe all workers should have access to a payroll deduct retirement plan at their employer to use to accumulate their personal capital. There should be as few obstacles as possible for workers to save and accumulate their personal capital.
Typically, a for-profit employer will sponsor a retirement plan only after a period of time proving that they have what it takes to stay in business. And the first employee benefit plan they normally provide is a health plan. Sponsoring a retirement plan could be years after. Since 1974 all individuals have had the ability to save through an IRA. But if we want to maximize the national savings rate, we need to encourage the implementation of workplace payroll deduct retirement plans to best promote workers accumulation of their personal capital.
Based on the Bureau of Labor Statistics’ National Compensation Survey for 2017, of the 116 million full and part-time private sector workers, only approximately 50% of them have access to a workplace retirement plan. I believe that free markets ultimately fill any void where there is a legitimate need, even overcoming set-backs. The States of Illinois and Oregon continue to roll-out their programs to fill the void for their citizens that are not covered by a workplace payroll deduct retirement plan.
Illinois Secure Choice
The State of Illinois requires employers with at least 25 employees, that have been in business for two or more years, and who do not currently provide a workplace retirement plan, the option to either adopt a private market retirement plan or automatically enroll their employees into the Secure Choice program. The Secure Choice pilot program began in May of 2018 and full program rollout will begin in November 2018. An estimated 1.2 million Illinois workers will gain access to a workplace payroll deduct retirement plan through Secure Choice.
All Oregon employers that do not sponsor a workplace retirement plan must facilitate the OregonSaves program covering over 1 million workers. The program is being rolled-out in phases based on the number of employees at the company without a workplace retirement plan. Employers with 100 or more employees began to implement the program last November and employers with less than five employees have until May 15, 2020 to enroll in the program. The Oregon State Treasurer has filed a notice that would create an option under which any Oregon citizen, employed or not, could participate in OregonSaves.
These two state programs provide a way for all of their tax paying citizens to have access to a workplace payroll deduct retirement plan. I believe they realize that someday many of the participants will have the personal capital to launch a new business and employ fellow citizens.
KnowHow 401(k), LLC
September 12th, 2018