According to a Web statement from State Senate President Donald E. Williams, Jr., S.B. 652 calls for the Connecticut Comptroller’s Office to initiate and administer a deferred compensation plan that would include a 401(k) open to any small employer (See CT Lawmakers Propose Retirement Plan Option for Small Businesses ).State employees, who have access to a 401(a), a 457, and a 403(b) plan, would not be able to enroll in the proposed 401(k) program that would be regulated by the Employee Retirement Income Security Act (ERISA).
The Williams statement said start-up costs would be recouped through administrative fees and then repaid to the state’s General Fund over the first few years. The state estimates that workers could save about 50% on fees through a state-administered plan.
“Our proposal will help people save for retirement and instantly give our small businesses a real advantage over out-of-state competitors,” said Williams, in the news announcement. “The fees associated with 401(k) plans have a disproportionate impact on people who work for small businesses. The result is that the majority of these employees don’t have 401(k) plans, and at the same time, the small businesses are at a competitive disadvantage when it comes to recruiting workers. We’re ready to take on the special interests and fight for working families and small businesses here in Connecticut.”
According to the Williams statement, the Connecticut AARP is launching an ad campaign supporting the proposal.
More information about the bill is available here .