CT Lawmakers Propose Retirement Plan Option for Small Businesses

February 21, 2008 (PLANSPONSOR.com) - A Connecticut state senator and the state Comptroller said they plan to sponsor legislation offering a new, lower-fee option to small businesses that want to provide a retirement plan to their employees.

According to the Hartford Courant, Senate President Pro Tem Donald E. Williams Jr. and state Comptroller Nancy Wyman said their proposal would allow Wyman’s office to provide a deferred compensation plan for businesses with fewer than 100 employees, small non-profit agencies, and the self-employed.

Under the program, small business employees would have individual accounts and be able to choose from various investment options. Businesses could contribute a percentage or set up a program to which employees would contribute.

Williams estimated that 75% of small businesses in Connecticut do not offer a retirement savings plan for their employees, in part due to high fees, the Courant said. He said the state would be able to offer much lower fees under the program that he claimed would be the first of its kind in the country.

Wyman said fees would be lower because financial services companies would bid to manage the retirement funds of the small businesses in addition to the state’s public retirement program. The combined assetswould provide leverage for negotiating for small businesses, she explained in the news report.