Harrisburg, PA — Treasurer Stacy Garrity and The Pew Charitable Trusts today announced that a significant majority of small-business owners across Pennsylvania support the creation of a state-facilitated retirement savings program to help employees who currently don’t have plans through their jobs to put money away for retirement.
The Pew Charitable Trusts surveyed 500 Pennsylvania small-business owners and found that 70 percent worry that their employees will not have enough money when they retire – and 67 percent of businesses that don’t offer a retirement plan say one big reason is the complexity of managing a plan.
“The results of this survey match what I hear when I travel across the state talking to small-business owners,” Treasurer Garrity said. “They want to offer retirement plans to their employees, but the costs and the red tape are far too burdensome for it to make sense. A commonsense plan like Keystone Saves – which would operate much like our very successful PA 529 College and Career Savings Program – is an ideal solution because it would make it easy for employees to save without any new burdens on employers.”
“Americans want to build a secure retirement, but it’s challenging for workers to save when they work for an employer that’s unable to offer retirement benefits,” said John Scott, director of Pew’s retirement savings project. “The data shows that Pennsylvania’s small-business community supports innovative programs like Keystone Saves that help businesses stay competitive and help workers gain access to savings with no costs for employers.”
Of the small businesses surveyed, 79 percent agree that state lawmakers should do more to help Pennsylvanians save for retirement, and 75 percent support a savings initiative that would automatically enroll employees – who could opt out at any time – into a payroll deduction program.
One key reason for the broad support is that small-business owners believe a statewide, portable retirement savings program will help level the playing field when it comes to attracting and keeping quality employees – helping to make their company more competitive.
The consequences of inadequate retirement savings go far beyond the individuals being impacted. Pew found that insufficient savings results in reduced tax revenue, decreased household spending, and a greater burden on a shrinking tax base. Every taxpayer in the state will ultimately pay more for those who may be forced to rely on state-funded social assistance programs after they retire. Pew has calculated that impact to be $1 billion per year over the next two decades. More than 80 percent of small-business owners say this is something they’re concerned about.
The full results of Pew’s survey are available here.
Keystone Saves has been introduced as House Bill 577 and Senate Bill 728 in the current legislative session. HB 577 was approved by the House on May 24.