STATE OF CONNECTICUT
THE STATE COMPTROLLER
|CONNECTICUT COULD BECOME FIRST STATE TO OFFER STATE ADMINISTERED 401(K) PLAN FOR SMALL BUSINESSES|
|Contact: Steve Jensen|
State Comptroller Nancy Wyman joined State Senate President Donald E. Williams, Jr. and State Senator Gary LeBeau at a Capitol news conference today to announce a proposal to create a state administered retirement-savings plan for small businesses, self-employed individuals, and not-for-profits.
If enacted, Connecticut would become the first state in the nation to offer such a plan.
Currently, about 75% of Connecticut businesses with fewer than 100 employees do not offer retirement plans such as a 401(k). A major reason for this problem is that small businesses often incur administrative fees that are too high to allow such programs to produce meaningful growth for retirement.
The Comptroller estimates that investors could save about 50% on typical fees through a state administered plan. This savings could mean that average workers would have to work four fewer years to achieve the same retirement savings they would have achieved under existing plans.
Wyman said the program will be an extension of the retirement-savings plans that her office currently administer for state employees: a 401(a) defined contribution plan, a 457 deferred compensation plan and a 403(b) retirement savings plan.
"My commitment to encouraging retirement savings is evidenced by the fact that in the past two years the assets in the state plans have more than doubled to approximately $2 billionóboth through increased participation and lowered fees," Wyman said. "Those assets give the state enormous leverage to offer small businesses a very affordable investment plan. I believe that this proposal can be another way in which state government uses its tremendous resources to help small business thrive."
Senator Williams said: "The fees associated with 401(k) plans have a disproportionate impact on people who work for small businesses. Our proposal will help people save for retirement and instantly give our small businesses a real advantage over out-of-state competitors."
The State Comptroller appreciates input on this and other issues from residents of the state. Please feel free to contact her office by phone - (860) 702-3300; mail - OSC, 55 Elm Street, Hartford, CT 06106; or, via E-mail - firstname.lastname@example.org
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