NV Could Help Small-Business Workers Save for Retirement
CARSON CITY, Nev. -- The Nevada state Legislature and the U.S. Senate are headed for a showdown of sorts. At issue is whether states should be able to manage retirement savings programs for workers in small businesses that don't offer payroll deduction savings.
A bill now being finalized in Nevada would establish a "Work and Save plan,” in which the state deducts money from workers' paychecks and selects a firm to invest it - at no cost to the state or the small business.
Scott Gulbransen, director of communications with AARP Nevada, said that half of Nevadans don't have access to an employer-sponsored retirement savings plan. And as a result, they’re at risk of coming up short when it comes time to retire.
“Fifty five million working Americans today do not have a way to save for retirement out of their regular paycheck,” Gulbransen said. "Yet we know that employees are 15 times more likely to save if they have access to a payroll deduction savings plan at work."
Supporters of the Work and Save plan are hoping for a hearing in April. Meanwhile, the U.S. Senate is expected to take up a resolution - already passed by the House - that would overturn a Labor Department rule allowing states to sponsor these types of plans.
Opponents of state-sponsored savings argue that people can opt to save money on their own, and say the plans amount to government overreach in the financial sector.
Gulbransen said that 57 percent of Nevada's private sector employees - or about 557,000 people - could benefit from such a plan. He said that helping individuals save for retirement ultimately reduces the tax burden for everyone.
"Taxpayers end up bearing the burden because without enough for retirement, the risk to the public and to the taxpayer with dependency on social safety net programs actually costs taxpayers more down the line,” he said.
Nevada's U.S. Senators, Democrat Catherine Cortez Masto and Republican Dean Heller, have not publicly committed to a position on the issue.