RALEIGH -- With individual retirement savings being insufficient for millions of North Carolinians, in 2019, the General Assembly passed the Small Business Retirement Study -- a measure that will advise state lawmakers on the best way to establish retirement savings options that work best for small business owners and their employees.
Since automatic payroll deductions have been the easiest way for workers to save for retirement, the state is exploring options for those businesses that do not offer their employees the ability to save through their paycheck. Other states have created retirement savings plans for workers who don’t have access to pensions or 401ks. Not only have these plans helped people save more of what they earn, they help small businesses compete for workers with larger companies, and save taxpayers money on public assistance for limited-income older adults.
Co-Chaired by Representative Bobby Hanig, who along with Rep. Stephen Ross, Rep. Jon Hardister, and Sen. Bill Rabon helped pass this measure, the Committee will:
· Identify ways the State can reduce the regulatory and operational burden on small businesses that want to offer payroll deduction retirement savings options to employees.
· Determine the mechanisms the State could use to assist citizens to be more prepared to retire in a financially secure manner, including the operation of a State-administered Individual Retirement Account or multiple employer plan.
· Explore the feasibility and benefits of partnering with other similar programs 30 established in other jurisdictions.
· Determine what the optimal oversight is for any proposed retirement program.
After the passage of the Study, stakeholders met with experts from North Carolina and other states to begin looking at elements of successful plans. Study Committee member Lisa Riegel of AARP North Carolina explains, “Longer lifespans and the lack of retirement savings bring great challenges to many when it comes to having the money they need as they age. With the federal government slow to act, 40 states have either established or are considering their own plans.”
“The Committee will devise a plan that works best for NC workers and businesses. A main objective is to create a plan that is easy to set up and that has no ongoing risks to the employer or the state. AARP hopes to work in a bi-partisan way to develop and enact a solution,” Riegel said.
The Study Committee, which is expected to share its plan by the end of March 2020, includes:
· Rep. Bobby Hanig (R-Currituck) Co-Chair
· Rep. Becky Carney (D- Mecklenburg)
· Ms. Lisa Diaz Riegel, Manager of Advocacy, AARP North Carolina
· Mr. Paul N. Tine, insurance agent, former State Rep. Dare County
· Senator James Perry, (R-Lenoir, Wayne) Co-Chair
· Senator Sam Searcy (D-Wake)
· Mr. Robert Cooley, Small Business Owner, New Hanover County
· Mr. Brian Lewis, New Frame LLC
This story is provided by AARP North Carolina. Visit the AARP North Carolina page for more news, events, and programs affecting retirement, health care, and more.
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