Less than half of U.S. Latino workers have retirement plans as a benefit of their job, leaving most with no savings for their golden years, according to a report by the National Institute of Retirement Security (NIRS).
The Connecticut Legislature has a proposed bill though which could help to remedy this. S.B. 249 creates a state-administered retirement savings plan for low-income private sector workers.
The state would create the Connecticut Retirement Security Trust Fund, which would be a low-cost retirement savings plan without increasing costs to employers. There would also be a payroll deduction component involved.
“It’s a payroll deduction so it doesn’t require the individual to write a check or anything,” Sen. Andres Ayala, D-Bridgeport, said. “It’s automatic.”
Ayala is the co-chair of the Legislature’s Aging Committee and has heard testimony on how seniors are living in destitute circumstances because they were not adequately prepared for retirement.
“This is for folks in their golden years to have something on the side to live on and improve their quality of life,” Ayala said.
The study conducted by NIRS also showed that Hispanics are much less likely than whites to have defined-benefit pensions, especially outside of public sector jobs. S.B. 249, An Act Promoting Retirement Savings, would address this by having employers with five or more employees utilize the state’s new trust fund.
The bill is written to have the state work with employers to set-up payroll deduction. This is because legislators believe this method will have a higher success rate as opposed to having individuals fund their own individual accounts on a schedule set by them.