State officials announce new retirement program
More than half a million Connecticut workers will soon be enrolled in a new retirement savings program. It's designed to help workers build a nest egg, but it's up to employees to opt out if they don't want to participate.
The state comptroller's office launched the MyCTSavings program Thursday.
The Roth IRA program doesn't cost businesses or taxpayers any money. State Comptroller Natalie Braswell says it's completely funded through employee contributions.
"It'll be easy for employers to enroll and give small businesses a no-cost way to help their employees and offer more competitive benefits," says Braswell.
Most businesses that don't already offer an employee retirement plan must participate in MyCTSavings. Currently, that impacts around 30,000 businesses. The largest employers have until June 30 to register.
The program could give some 600,000 workers access to a retirement account, according to Braswell.
Senior advocates say the option helps everyone.
"There are just so many women age 65 and up who rely solely on Social Security for their income," says Nora Duncan, of AARP CT.
Employees will automatically be enrolled unless they opt out of the program. Once a business registers, workers will receive a letter explaining their options. They will then have 30 days to opt out before money comes out of their paycheck.
The default deduction is 3%, but participants can contribute more or less to their account. Contributions are limited to $7,000 a year, depending on someone's age.
Although MyCTSavings is sponsored by the Connecticut Retirement Security Authority, it's actually run by Vestwell, a private third-party administrator.
Still, Republican leaders say the timing is terrible.
"The last thing mom and pop shops on our main streets need right now is another onerous mandate from their government," said House Minority Leader Vin Candelora. "Forcing employers—particularly those with limited staffing resources—to jump through more bureaucratic hoops under threat of penalty won't help them grow stronger and create more jobs here."