Keystone Retirement Security Program would offer employees without pensions an easy way to save for the future
HARRISBURG, Oct. 21 – State Rep. Mike Driscoll, D-Phila., has introduced legislation with Rep. Mike Hanna, D-Centre/Clinton, that would offer Pennsylvanians without pensions a convenient process to ensure a more secure retirement.
House Bill 2396 would provide a simple and convenient way for Pennsylvanians who do not have access to an employer-sponsored retirement plan to save money through automatic payroll deduction for their retirement.
"As a large number of residents begin to retire without the savings needed to meet their expenses, Pennsylvania is facing what some are calling the ‘Silver Tsunami.’ Ignoring this issue is simply not an option for our state anymore," Driscoll said. "Failing to address this problem would have devastating effects for future retirees and the financial well-being of the state as a whole."
Under the Hanna-Driscoll plan, employers with five or more employees that don't already offer a retirement plan would be required to offer their employees enrollment in the Keystone Retirement Security Program. Workers could decline if they choose; otherwise, a small portion of their pay would be automatically deducted and deposited into an account with the state Treasurer's Office. Treasury would manage the accounts similar to the way it manages the TAP 529 accounts.
Driscoll has sought a legislative study on the concept since early 2015.
"There’s no longer a need to study this," Driscoll said. "We know that it works well because a growing number of states have developed the same idea and put it into use. Based on their success, Pennsylvania should take steps to set up our own program as soon as we can."
Driscoll said the plans would not place any additional administrative or financial burden on private employers in Pennsylvania. The federal government recently issued guidance designed to facilitate and encourage these types of individual savings programs at the state level. No employer contributions would be required or permitted to an employee's account.
"Retirement security shouldn’t be considered a luxury, and this plan would help ensure that every employee in the state has the opportunity to save for their future," Driscoll said.