Retirement Policy Initiatives in the States

Americans’ top financial concern for at least the last 15 years: retirement security. And that raises many eyebrows, including those of government leaders. “Politicians look at that and wonder what to do to alleviate that concern,” says Andrew Remo, Director of Legislative Affairs for the American Retirement Association — and that includes politicians on the state level.

Remo made his remarks in the Aug. 23 ASPPA webcast “Retirement Policy Initiatives in the States: How You Might Be Impacted?”

Remo noted that well over half the states — 32 — are considering or have enacted initiatives to address retirement plan coverage for private sector workers, and that seven states have enacted state sponsored retirement programs or marketplaces for private sector workers. Still, he said, zero state programs are fully implemented or collecting contributions.

1. And that includes the first one enacted, that in Massachusetts, which Remo described as a “full-blown 401(k) plan” and applies to non-profit employers with 20 employees or less. He noted that the Bay State is “still waiting for on an IRS green light” before the plan will be implemented.
   
   Remo identified four kinds of state initiatives:
   
   1. study bills
   2. state programs with a mandate on private employers over a certain size
   3. state marketplace bills
   4. state programs without a mandate
   
   Once a state study bill is under way, Remo said, “it’s a good sign that something else is coming down the line.” He noted that most state programs that incorporate mandates are state-run IRA programs. He did not mince words about state programs that lack a mandate, calling them “the worst of both worlds” and calling them “an extra competitor in the marketplace for no good reason.”
   
   Even plans that involve mandates are not free from issues, Remo indicated. For instance, he said that the Oregon Retirement Savings Board is silent on how the state’s Retirement Savings Plan will be enforced, and commenting that the measure that created the plan “gives the board a lot of power to create a program in their own image.”
   
   Remo’s observations about other plans indicated that states’ approaches can be as different one from the other as the states are themselves. For instance, he said that Maryland’s program “is not quite a mandate but does create a program,” and that it will be “interesting to see if other states take such a ‘carrot’ approach” as Maryland does. On the other hand, he said that the Connecticut program “erred on the ‘paternal philosophy’ side.”
   
   In a little over four months, a state program will be implemented for the first time, Remo noted — that of Washington state, which will launch its Small Business Retirement Marketplace in January 2017. But the groundwork is being laid now, Remo indicated, saying, “The rubber’s going to meet the road” regarding details of the plan in the second half of 2016.
   
   For more information, and to purchase the on-demand webcast, click here. And for information about other ASPPA on-demand webcasts, click here.