New Jersey legislators have approved a retirement savings plan that would provide private-sector workers without employer-sponsored plans a means of putting away money for the day when they leave the workplace.
But it's not clear whether Governor Chris Christie will sign it.
The Sweeney-Turner-Sarlo plan, bill S-2831/A-4275, would create the Secure Choice retirement program, and was passed with bipartisan support—although not without opposition from the New Jersey Business and Industry Association, because of the employer mandate, and from the American Council of Life Insurers, which has warned that startup costs for the state would be high.
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Christie is not known for his support of retirement plans; in fact, he's repeatedly cut the state's pension contributions despite campaigning to do otherwise.
On his watch, New Jersey's state pensions' unfunded liabilities have grown to more than $40 billion, and the state's credit rating has been downgraded nine times.
So the fact that the proposed private-sector retirement plan has the support not just of the New Jersey legislature but also of small-business owners in the state, according to AARP—also a staunch supporter of the bill—may not win it any approval once it hits the governor's desk.
Employers with 25–100 employees that do not offer a retirement plan would be required to participate, and to handle enrollment and automatic payroll deductions, should the plan become law. However, they would not be required to contribute.
Participation for smaller companies would be voluntary, as would employee participation, and the default contribution for employees would be 3 percent.
In addition, the plan would be portable from job to job.
The fund would be overseen by an unpaid seven-member Secure Choice Savings Board, appointed by the governor and legislature, and managed by a firm that the board would hire.
The bill limits the firm's fees to no more than 0.60 percent of the fund's assets. Funds in the plan would be held separate from other state funds.
According to AARP, 1.7 million people in the state do not have access to a retirement plan at work.
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