AARP Eye Center
State Legislatures Pass AARP-Supported Retirement Savings Bills
By Natalie Missakian, May 26, 2023 01:54 PM
En español | We applaud state lawmakers in Minnesota, Missouri and Vermont for passing AARP-supported legislation this week to help private-sector workers save for retirement.
In Minnesota, lawmakers approved legislation that would establish a state-facilitated retirement savings program starting in 2025, after nearly a decade of lobbying by our state office. The bill, which Gov. Tim Walz signed on May 19, requires businesses with five or more employees to participate if they don’t already offer a way for workers to save for retirement.
“Most small business owners want to provide retirement benefits to their employees but lack the time, knowledge, and resources to do so,” AARP Minnesota State Director Cathy McLeer said in a statement.
In Missouri, lawmakers gave the green light Tuesday to a voluntary public-private retirement option for small businesses with fewer than 50 employees that don’t already offer a savings program. The legislation, which awaits Gov. Mike Parson’s signature, would allow eligible small businesses to offer their workers a state-facilitated 401(k) plan and match a portion of employees’ contributions if they choose.
AARP Missouri State Director Craig Eichelman called the bill’s passage “a victory for employees of small businesses, who typically don’t have access to workplace retirement savings like a 401(k).”
Vermont’s legislature unanimously passed a measure that would phase in a state-facilitated retirement savings program in 2025 for more than 88,000 workers in the state who lack access to a workplace plan. The bill awaits Gov. Phil Scott’s signature.
The legislation, like Minnesota's, requires employers who do not already offer a 401(k) or similar retirement plan to enroll their employees in a privately managed Roth IRA. Contributions would be automatically deducted from workers’ paychecks, and those who do not wish to contribute may opt out.
AARP research shows people are 15 times more likely to save when they can do so at work, and 20 times more likely if their workplace saving is automatic.
“Having access to a retirement plan at work is critical for building financial security later in life,” said AARP Vermont State Director Greg Marchildon. “Once implemented, VTSaves will help provide an easy pathway for workers to build a safety net and grow the savings they need for a more secure future.”
AARP has been working for years to improve retirement savings options for employees. Last year, our advocacy helped push retirement savings bills over the finish line in Delaware and Hawaii. Dozens of other states and Puerto Rico are considering similar measures.
Missouri and Minnesota would become the 17th and 18th states to enact retirement savings legislation once their respective bills are signed. Vermont passed a voluntary public-private retirement savings program in 2017 and is moving to an automatic IRA program.
Read more about the new laws in Minnesota, Vermont and Missouri, and learn about state-facilitated retirement accounts in other states at our State Retirement Resource Center.
This post has been updated.
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