The Connecticut Retirement Security Board introduced legislation Thursday seeking to create a quasi-public entity to run a state-run retirement savings program for private-sector employees.
Employers would not be required to contribute but must provide an automatic payroll deduction. Employees could opt out of the program after automatic enrollment.
The bill also recommends requiring a private-sector provider contracted for recordkeeping and/or investment management to take on any startup costs to be repaid through the administrative fees of the program.
The board, co-chaired by State Comptroller Kevin Lembo and State Treasurer Denise L. Nappier, said in its proposed legislation the program would not be mandatory for businesses that currently offer a 401(k) plan or other workplace-based retirement savings options all employees.
The program could serve almost 600,000 residents who currently have no access to workplace-based retirement savings.
The plan faces significant opposition from business lobbying groups including the Connecticut Business & Industry Association.
Other provisions of the legislation include:
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The quasi-public entity would be empowered to delay the implementation date, in whole or in part, or for particular categories of employers, as it deems necessary to minimize any disruption or burden on employers;
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This entity would be subject to significant transparency provisions, including requirements that it provide the state comptroller with checkbook-level financial data to be included on the state’s OpenCheckbook website;
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The authority would have educational, outreach and administrative oversight, but not enforcement powers; and,
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Employers’ compliance with the requirements of the program would be enforceable either through a private right of action or by the state Labor Commissioner.
