Kallman, Shanley, advocates hold press conference to support retirement savings bill.
STATE HOUSE – Most Rhode Islanders save for retirement through an employer-based plan such as a pension or 401 (k). But 172,000 Rhode Island workers (roughly 40% of the state’s workforce) do not have access to this crucial savings tool.
Sen. Meghan E. Kallman and Rep. Evan P. Shanley were joined today by General Treasurer James A. Diossa and advocates from across the state who hope to change that through a program called “secure choice.”
“It’s in everyone’s interest to help workers save for retirement,” said Senator Kallman (D-Dist. 15, Pawtucket, Providence).
“The evidence is really clear: giving workers access to pre-tax payroll deductions is the best way to encourage retirement savings. And having those savings is a big part of being able to live a comfortable and healthy retirement, which is what we want for everyone in our community.”
Legislation (2023-S 0089, 2023-H 5417) introduced by Senator Kallman and Representative Shanley would allow Rhode Island workers to contribute up to 8% of their salary to individual savings accounts through payroll deductions, at no cost to their employers.
Workers would be able to choose to invest in conservative, moderate or aggressive investment plans and take their savings with them when they change jobs.
“Most Rhode Island workers hope to retire someday,” said Catherine Taylor, State Director of AARP RI. “When we do, Social Security isn’t enough to pay the bills. We need to give all workers the chance to start saving now so they can retire with more security.”
Six other states, including neighboring Connecticut, have already established secure choice programs and ten others are currently establishing them.
Among the biggest beneficiaries are small businesses and their employees.
Approximately 70% of workers at companies with fewer than ten employees have no access to retirement savings through work.
“As a business owner, I fully support secure choice. A benefit like this would help businesses grow, especially small ones like mine,” said Yvonne Peal, owner of Sparkles and Glow by Yvonne.
“Secure choice provides a simple way to build retirement savings and at no extra cost to me. I urge the General Assembly to pass this legislation immediately.”
“When I talk to small businesses in my community, they really care about their staff and want their workers to be able to save for retirement,” said Representative Shanley (D-Dist. 24, Warwick, East Greenwich).
“But small business owners can’t be experts in everything and often don’t know where to start with offering retirement savings. This bill gives them a way to support their workers and gives workers a chance to save.”
“Too many employees across the state are working day and night without the assurance of a solid financial future,” said Treasurer Diossa.
“By providing workers with an optional retirement plan, the Secure Choice Act is a prime example of how government can improve the lives of workers. We must fulfill the fundamental promise that a lifetime of hard work will be met with a retirement of dignity and security.”
The legislators were joined by a broad coalition of advocacy groups from across the state including AARP Rhode Island, the Latino Policy Institute, SEIU, Progreso Latino, Working Families Party, Hispanic Chamber of Commerce and the Rhode Island Black Business Association.
“We’re grateful to Senator Kallman and Representative Shanley for championing this bill,” Taylor said. “Let’s get this done for Rhode Island’s workers.”