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Connecticut Secure Choice Update
Private-sector workers in Connecticut could have access to a state-sponsored retirement savings program by the middle of 2021, culminating nearly four years of planning that was punctuated by several setbacks.
Connecticut Secure Choice Update
The Connecticut Retirement Security Authority (CRSA) board is preparing to launch a Secure Choice-inspired program that would collect a 3 percent payroll deduction from workers whose employers do not offer retirement benefits. The board in April chose Sumday, a subsidiary of BNY Mellon, to serve as the program's administrator. In recent months, it has been working on its operating budget and firming up program governance, among other tasks.
The CRSA is charged with developing retirement savings options for the nearly 600,000 Connecticut workers who are not offered a plan through their employer. State Comptroller Kevin Lembo serves as chair of the 15-member board.
According to news reports, the CRSA is currently in negotiations with an account manager, which it expects to complete early in 2021. A pilot program will begin with a small group of eligible employees to test the program before it is fully launched.
The legislation authorizing the program narrowly passed in 2016. Supporters include former Governor Dannel Malloy, Lembo and labor unions; opposition came from Connecticut Business and Industry Association, which saw it as an attempt by the state to undercut the financial and investment services industry.
The program fell behind initial plans to launch in 2018 and experienced other setbacks, including funding shortfalls, the dismissal of its first executive director, and the ripple effects of the closely watched legal battle over a pioneering program in California, known as CalSavers.
At a briefing to the board in October, Andrea Feirstein of AKF Consulting Group reported that most plans emphasize asset accumulation, but there has been increased interest in lifetime income funds. She also said there may be opportunities to collaborate with smaller states and create coalitions to expand these programs.
You may also be interested in: Maine Advance Secure Choice Bill; Colorado Signs Colorado Secure Choice Savings Program Into Law.
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