Pennsylvania Treasurer Joe Torsella today was joined by Senators Pat Browne and Art Haywood and Representatives Matt Bradford, Mike Driscoll, and Mike Peifer to unveil the final report on the proceedings of the Treasury Private Sector Retirement Security Task Force (Task Force). The report outlines the findings of four informational hearings held by the Task Force and recommends the establishment of a state-facilitated automatic individual retirement account (Auto-IRA) program, as a solution to Pennsylvania’s private sector retirement security crisis.
“Pennsylvania is facing a crisis in retirement security for private sector workers and retirees. One that—absent legislative action—will not only hit our state coffers, but also some of our most vulnerable citizens. By offering an easy, convenient way to save for their retirement, we’re doing something much bigger than simply avoiding costs we can’t afford to the state budget. We’re actually helping to reknit a fraying sense of community in our state. I commend Senators Browne and Haywood and Representatives Bradford, Driscoll, and Peifer for their leadership, and I strongly urge the General Assembly to take action on this commonsense solution.”
Pennsylvania Treasurer, Joe Torsella
A state-facilitated Auto-IRA, modeled similarly to the PA 529 College and Career Savings Program, would allow private employers not currently offering any retirement savings the opportunity to provide access to portable, retirement savings options. This approach would be at no cost to employers and also allow voluntary participation by independent contractors, consultants, gig workers, and other self-employed individuals. The program would, in time, be self-sustaining.
“More than two million working Pennsylvanians do not have access to a retirement savings program at work and 750,000 workers who do have access to a program at work do not participate. This has to change. If it doesn’t, Pennsylvania taxpayers will be the ones who have to cover their costs in retirement through long-term care and other public assistance programs. Senator Haywood and I will work together to introduce legislation that will provide for a private retirement savings plan for Pennsylvania workers whose employer does not offer a retirement plan. This ensures that all Pennsylvanians will have financial security when they retire.”
Senator, Pat Browne
“The Montgomery County Aging Department expressed their concerns regarding over 80-year-olds running out of money in a meeting in 2015. By 2020, 1 in 4 Pennsylvanians will be an older adult. In our Commonwealth, approximately 2.1 million residents do not have access to a workplace retirement plan. Saving for retirement must be part of the solution for these individuals, their families, and communities.”
Senator, Art Haywood
The Task Force was assembled by Treasurer Torsella to examine the scale of the private sector retirement savings crisis, evaluate the feasibility of retirement savings plans administered by other states like Oregon and Vermont, and to present options to help Pennsylvanians save for retirement.
“Pennsylvania is facing a silver tsunami of retirees, so it is important for us, as a commonwealth, to deliver a savings program that could help many of them and bolster the nest eggs of younger workers. We like the notion of an auto-IRA program because it means working Pennsylvanians who do not now have a savings program will have one as soon as it is signed into law by the governor.”
House Democratic Appropriations Committee Chairman, Matt Bradford
This report does not represent task force members in their individual capacities. While no single program design garnered unanimous support from task force members in every detail, and the task force was not convened to agree to specific legislative solutions, the recommendations put forth in this report represent the broad and bipartisan consensus at the conclusion of the work of the task force toward a Pennsylvania program based on the auto-IRA model.
“Opening retirement savings programs are readily available, but more than 2 million working Pennsylvanians are not using them. A retirement savings program like Treasurer Torsella is talking about is the right way to go because it’s affordable and easy for employees to start.”
Representative, Mike Peifer
“Working Pennsylvanians who worry about their retirements would get peace of mind with a low-cost retirement savings program that works for them and builds a solid nest egg. Treasurer Torsella’s work on this front is exactly what we needed to bring retirement security to Pennsylvanians.”
Representative, Mike Driscoll