Join With Array of Organizations with Focus on ‘Secure Choice’ Plan
TRENTON – Senate President Steve Sweeney, Senator Paul Sarlo and Senator Shirley Turner joined with the AARP and a broad array of advocacy organizations to discuss the importance of providing retirement security in New Jersey, focusing on the “Secure Choice” plan that would promote retirement savings for employees without pension plans. The roundtable discussion was held in the State House as part of the “New Jersey: Investing In You” initiative, a multi-part effort to develop plans to invest in key areas to promote economic growth and opportunity.
“We have to work to find ways to make retirement more affordable in New Jersey so that retirees can support themselves financially,” said Senator Sweeney. “Retirement should not just be for the wealthy. Everyone deserves a secure retirement and the opportunity to live with dignity after working to support themselves and their families.”
Democratic legislators are developing strategies for investment initiatives in each of six identified vital areas: early childhood education, college affordability, world class transportation, “promise neighborhoods” to revitalize communities, public-private partnerships to aid job creation and retirement security. Senator Sarlo, chairman of the Senate Budget and Appropriations Committee, is leading the effort on retirement security.
“We need to do more to help current retirees and the hard-working taxpayers who are looking to retire in the years ahead,” said Senator Sarlo. “That’s why we are examining proposals to help by exempting higher levels of pension income and 401K, Individual Retirement Accounts and annuity withdrawals from state taxes and to advance a plan that would help workers who are not covered by pension or 401K programs to set up retirement savings plans with automatic payroll deductions through their workplaces.”
The Secure Choice plan has the active support of the American Association of Retired Persons and a growing number of citizen organizations. The legislation would establish individual retirement savings accounts for workers in the form of an automatic enrollment payroll deduction at their workplace, providing private sector employees a means to save for their retirement.
“The savings program would offer companies the ability to establish individual retirement accounts for their employees, allowing them to make automatic payments from their salaries,” said Senator Turner. “Participation would be completely voluntary for workers, but the program would be convenient, low cost, and portable, which is important in an uncertain economy in which workers are more likely to change jobs or to work part-time.”
The roundtable discussion included AARP, New Jersey Citizen Action, New Jersey Main Street Alliance, The African-American Chamber of Commerce, the Anti-Poverty Network, AFL-CIO, Catholic Charities of Trenton, the New Jersey State Association of Jewish Federations, Ubiquity Retirement & Savings, the Asian Indian Chamber of Commerce and the Employers Association of New Jersey.
“Secure Choice is good for seniors, good for business and good for New Jersey,” said Doug Johnston, of AARP. “Businesses would have an exceptionally low-cost, hassle-free way to offer their employees a basic retirement plan. Employees would have a choice of whether to participate. Research shows individuals are 15 times more likely to save for retirement if they can do so through their place of work. AARP believes Secure Choice is a commonsense approach that helps individuals build retirement savings so more people can have the freedom to live independently throughout their lives.”
An estimated 54 percent of New Jersey’s private sector workers do not have a retirement savings plan at work and 40 percent of households headed by a 45- to 54-year-old do not have any retirement savings at all.
A poll among state residents age 35 to 64 found that two-thirds of the respondents are “anxious” about financing their retirement and that 70 percent favor a program like Secure Choice. Approximately 1.7 million people in New Jersey don’t have a means to save for retirement at their jobs, according to AARP.