Bills Mandate Study of State Plan for Private Employees

Under the proposed legislation, an 11-member task force would study the availability of retirement plans and trends in retirement savings, as well as the projected needs of future retirees, according to The CT Mirror. The study panel would include representatives from the governor’s budget office, other constitutional officers, the state Commission on Aging, and experts in the field to be appointed by legislative leaders and Gov. Dannel P. Malloy. 

Council 4 of the American Federation of State, County and Municipal Employees is trying to rally support for the bills, but one of the key lawmakers behind the proposal, Sen. Edith G. Prague, conceded late last week that the chances of passage this year are poor with the legislature scheduled to adjourn in less than two weeks.  

According to the news report, the state’s chief business lobby, the Connecticut Business and Industry Association, opposes the study, arguing it would harm the private financial services industry and expose taxpayers to financial risks.  

Teresa Ghilarducci, director of The New School’s Schwartz Center for Economic Policy Analysis (SCEPA), rejected those arguments and said a state-run investment plan ultimately would bolster the private financial services sector, just as Social Security did nearly 80 years ago (see “Proposal Suggests Giving Private Workers Access to State Pensions”).  

In Massachusetts, legislators recently approved a bill allowing nonprofit entities, which represent about 14% of the state’s workforce, to access retirement savings plans managed by the state treasury (see “MA House Approves Non-Profits’ Use of State Retirement Plans”).