The numbers don’t look good: almost half of all private-sector employees in Vermont lack access to a retirement plan through their employer, and for those who are able to save, it’s often “insufficient”.
In fact, the average balance for Vermonters with defined contribution accounts is the lowest in the country.Better retirement savings would strengthen the financial security of retirees and their families, as well as the state’s economy.
That’s why VPIRG believes it’s time for Vermont to establish a public retirement program.
Vermont lawmakers are currently considering legislation that would create a publicly administered retirement program, called the “Green Mountain Secure Retirement Plan,” that small businesses (with 50 or fewer employees) can opt into to provide their employees the option to set aside part of their pay for retirement. Any Vermonter without current access to a plan through their employer could join. Here’s a couple reasons why we support this plan:
- This type of program is especially beneficial for small-business states like Vermont, where many smaller employers don’t have the financial or administrative resources to offer retirement plans;
- Access to payroll deduction retirement plans makes it easier for employees to save, which has been shown to be a critical factor in households contributing to a plan;
- Greater retirement savings also help retirees control their own economic security;
- And with this proposed plan, an additional 100,000 Vermonters would gain access to a retirement plan.
The Green Mountain Secure Retirement Plan is based on recommendations from the Public Retirement Study Committee, chaired by Vermont Treasurer Beth Pearce. Charged with finding a way to save businesses the cost of managing their own plan while providing employees an avenue to save, the committee recently released a report in support of a “voluntary open multiple employer plan (MEP)”.
With uncertainty at the federal level and Congress already acting to make it more difficult for states to expand access to quality retirement plans for workers, we need to act now.
We hope you’ll join us in asking the legislature to support a public retirement program,
so all Vermonters can save.
Public Retirement Study Committee – Feasibility of Establishing a Public Retirement Plan
National Institute on Retirement Security – Vermont Fact Sheet
AARP – Vermont Fact Sheet
VPR – Dec. 2016 article, “Committee Will Recommend State Create Retirement Plan For Private Sector Workers”
Washington Post – Feb. 2017 article, “Congress Could Pump The Breaks On These New Retirement Plans”