A recent survey of more than 450 Connecticut small-business owners by national seniors advocacy nonprofit AARP showed significant support for a public retirement savings plan that would encourage retirement savings and, in so doing, give small businesses a competitive edge many now lack.
More than 60 percent of respondents said they support a state-led retirement savings plan.
Nearly 80 percent agreed that Connecticut should be doing more to encourage residents to save for retirement. Those surveyed said they favor low-cost, voluntary plans that would follow employees from job to job, offering flexibility and security for the future.
Through a law signed in July, the state created the Connecticut Retirement Security Board to conduct a market feasibility study to implement a public retirement plan. The board is due to report to the governor by Jan. 1 and submit a proposal by April 1.
“Connecticut is leading the nation in efforts to improve the financial security of its residents by creating an affordable, accessible retirement savings plan that would make it easier for small businesses to offer retirement accounts to their employees,” said Nora Duncan, AARP state director. “Small businesses in Connecticut support this effort because they know it will help improve the financial security of their employees – and their bottom line.”
Approximately 750,000 state residents are not taking part in an employer-sponsored retirement plan, including nearly half of all workers ages 25 to 45, according state Senate President Pro Tempore Martin Looney, D-New Haven. “Social Security notwithstanding, this does not bode well for the retirement planning of a vast number of Connecticut residents. So I am heartened to see that Connecticut business owners are welcoming this public retirement savings plan option and would encourage their employees to take advantage of it.”
Over the past decade alone, the percentage of workers in Connecticut whose employer did not sponsor a retirement plan rose from 34 percent to 41 percent, according to House Majority Leader Joe Aresimowicz, D-Berlin.
“And with today’s average Social Security benefit being just $15,228 per year, our state is on the brink of a retirement crisis that will not only impact retirees, but next-generation workers as well,” he said. “Every person who has worked hard throughout their life and played by the rules should have the ability to retire with dignity.”
The survey’s business owners were a mix of ideology: 29 percent conservative, 40 percent moderate and 17 percent liberal. The survey found that two in five small-business owners do not provide a retirement savings plan to their employees and about one in five do not have a retirement plan for themselves. The most common reason cited was cost (49 percent). However, 64 percent of those who do not currently offer a retirement plan said they would use the public plan if it were offered.
AARP reported individuals are 15 times more likely to save for retirement if they can do so through their job.