Sen. Julie Kushner, D-Danbury, led Senate passage recently of a bill that will give about 12,000 unionized personal care attendants (PCAs) in Connecticut access to the state-sponsored MyCTSavings retirement savings program, thereby ensuring they have the option of some sort of retirement nest egg.
Senate Bill 1221 passed the Senate recently on a 25-11 party line vote and now heads to the House of Representatives for consideration.
“Our personal care attendants, they are for the elderly and disabled in our communities, and they do incredibly important work, yet they don’t have secure retirement,” Kushner said on the floor of the Senate during debate on the bill. “By being able to participate in the MyCTSavings program, we are not only investing in them but investing in our future and making sure that when they retire on that, they will have the same kind of secure and comfortable retirement that so many other workers in Connecticut enjoy.”
The retirement program is run by state Comptroller Sean Scanlon. The initiative automatically enrolls private-sector workers in Roth IRA retirement plans if their employer does not offer the plan.
“Over the past three years since MyCTSavings launched, through touring small businesses and hearing from their employees, we’ve learned a lot about how we can continue to strengthen this program and how much it means to business owners to provide their employees with the opportunity to save for retirement,” Scanlon said.
Under current law, PCAs who are paid through state-sponsored programs are not eligible to participate in MyCTSavings. SB 1221 broadens the program’s eligibility, allowing state-sponsored PCAs access to the retirement savings plan already available to their privately paid colleagues.
During a public hearing on the bill in February, Scanlon testified that nearly half Connecticut workers were employed at businesses that do not offer retirement plans, in most cases because the employer can not afford the expense.
“All Connecticut employers with five or more employees—at least five of whom are paid more than $5,000 per year—are required to offer MyCTSavings if they don’t offer an alternative retirement plan,” Scanlon said. “If they don’t offer one, all the business needs to do is tell our office the names of their employees. We then create Roth IRA accounts for each employee and it’s up to them whether they want to start saving or not. All we ask of the employer is that they add the payroll deduction to the employee’s check. That’s it. We do all the rest and there is no fee to the business for participation.”
Research by the AARP suggests that Americans are roughly 15 times more likely to make contributions to a retirement savings plan when a program is offered by an employer and 20 times more likely if those contributions are automatic.
Personal care attendants testified in favor of the change during the public hearing. Several PCAs, including Manchester resident Claudette Arthur – who is a member of District 1199, New England SEIU –reported having little or no savings for retirement.
“I’m 72 years old and still working because I have no retirement options,” Arthur said. “Yes, you heard that right, I’m 72, and I have no plans to stop working anytime soon.”
