Senate Democrats in Connecticut are pushing for a state-sponsored 401(k) retirement plan for small businesses, designed for employers who cant afford to offer a retirement plan to their workers.
Senate President Donald Williams Jr., D-Brooklyn, said he estimates about 75% of Connecticuts small employers those businesses with 100 or fewer employees do not offer retirement benefits, leaving approximately 500,000 workers without a plan.
The bill has seen strong opposition from the states pension professionals, bankers, insurers and financial advisers, who argue that the program is too expensive, costing $1 million for the first two years and $400,000 in following years.
Also, employees of small businesses can set aside retirement funds in Individual Retirement Accounts.
Clare Hushbeck, a labor economist at the
The bill does not require small business employers to provide a company match, which is both a key advantage to 401(k) plans as well as the reason these plans are so costly.
The state of Washington passed legislation last year to set aside money for a two-year study of the concept, and similar legislation is being debated in California, Illinois, Indiana, Maryland, Michigan, Ohio and Pennsylvania, according to the AARP.