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By Sean Forbes
Nov. 24 — A week after the Department of Labor issued guidance aimed at helping states expand retirement coverage to their private-sector citizens, Massachusetts legislators took up a bill aimed at solving the retirement crisis in the Bay State.
The bill is important because many Massachusetts private-sector workers don't have access to a workplace retirement plan—about 1.2 million out of a total population of about 6.745 million—the bill's sponsor, state Rep. James J. O'Day (D), told Bloomberg BNA.
The bill (H. 924), as well as other retirement security legislation, had support at a Joint Committee on Financial Services hearing held Nov. 23, from the Service International Employees Union Local 509 and Secretary of the Commonwealth of Massachusetts William F. Galvin, O'Day told Bloomberg BNA.
O'Day's bill would establish a Secure Choice Retirement Savings Board to administer two retirement savings trust funds known collectively as the Secure Choice Retirement Savings Trusts. The first trust, the Secure Choice Multiple Employer Retirement Trust (MERP), would be a profit-sharing defined contribution plan offering individual accounts. The second trust, the Secure Choice Individual Retirement Account Trust (IRAP), would accept individual contributions through payroll deductions and direct payments into IRAs, akin to Illinois's Secure Choice Savings Program payroll-deduction IRA.
Employers that currently don't sponsor any retirement plans would be required to offer some sort of plan under the Employee Retirement Income Security Act, an automatic enrollment payroll-deduction IRA, or the MERP or the IRAP.
O'Day said that the DOL's package of guidance, including a proposed rule on payroll deduction IRAs and subregulatory guidance on 401(k)-type plans, released Nov. 16, was “a little bit exciting”.
O'Day said he's “hopeful” that the bill will move forward and that ultimately, its provisions will be cost-effective, efficient and accomplish the goal of expanding retirement coverage.
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