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North Carolina lawmakers introduced House Bill 496 to the state’s general assembly this week to help more workers save for retirement.
Legislators in the Tar Heel State supporting the legislation argue the bill is necessary to address the lack of retirement savings options for employees without access to a retirement plan at work. The bill was sponsored by State Representatives Jarrod Lowery, Jeffrey McNeely, Jon Hardister and Harry Warren, all Republicans.
“The General Assembly finds that too many North Carolina citizens have no or inadequate savings for retirement, and an estimated 1.7 million North Carolina working families, including employees, independent contractors, and the self-employed, have no access to an employer-sponsored retirement plan or program or any other easy way to save at work,” the draft text states. “More adequate, portable, low-cost, and consumer-protective retirement saving by North Carolina households will enhance their retirement security and ultimately reduce the pressure on state public assistance programs for retirees and other elderly citizens and the potential burden on North Carolina taxpayers to finance such programs.”
Data from the AARP show that 48% of U.S. private sector workers aged 18 to 64—57 million people—do not have access to an employer-sponsored retirement plan. According to the AARP data, employers at small businesses are less likely to provide a retirement plan, and that access differs substantially by race, ethnicity and gender.
Coast to Coast
Across the U.S., 18 non-federal government entities have enacted retirement savings programs: 16 states and two cities, according to data compiled by the Center for Retirement Initiatives at Georgetown University’s McCourt School of Public Policy.
By proposing the state program, North Carolina lawmakers joined a group of nine states with active legislative proposals or study commissions in 2023. Alabama, Alaska, Florida and South Dakota are the only states without legislation or a commission on the topic.
The bill would make it state policy to assist private sector “working households,” particularly those with low or moderate income, to voluntarily save for retirement and to retirement savings and other retirement plans for employees in the state.
The legislation, if passed, would establish the North Carolina Small Business Retirement Savings Board to administer the program, the bill states.
“The General Assembly intends to establish a North Carolina Work and Save Program that will use the services of competent and qualified private-sector entities selected by the North Carolina Small Business Retirement Savings Program Board to administer the Program and manage the funds on behalf of the Program participants,” according to the bill text.
After the bill was filed in the North Carolina House of Representatives on Tuesday, it passed a first reading one day later and was referred to the House Appropriations Committee on Wednesday, according to the North Carolina General Assembly website. A timeline for the committee to review the bill is unclear.
A request for comment on the bill made to the Lowery’s office was not returned.
State Assets Increase
According to Georgetown data, two cities and 14 of the states have built auto-IRA programs. The California, Connecticut, Illinois and Oregon programs are mandatory for employers to participate.
CalSavers is the largest of the state-facilitated program, comprising $435.9 million, OregonSaves holds $180.9 million and the Illinois Secure Choice Program held $106.8million, according to the February data.
CalSavers surpassed 100,000 enrolled employers in its auto-IRA program in July 2022.