Mullins, Gallagher introduce Keystone Saves legislation
HARRISBURG, April 10 – Legislation introduced today by state Reps. Kyle Mullins and Pat Gallagher would establish a voluntary retirement savings program for the millions of Pennsylvania workers who currently have no opportunity to save for retirement at their place of employment.
The program, called Keystone Saves, would allow employees to contribute to an Individual Retirement Account through an automatic payroll deduction.
“A financially secure retirement should follow decades of hard work at the end of a career. Unfortunately, a growing number of workers are facing a retirement without sufficient savings,” said Mullins, D-Lackawanna. “Under Keystone Saves, these employees would now have a chance to save for their future their way with no burden to taxpayers or employers.”
“This legislation is a win-win for everybody,” said Gallagher, D-Phila. “It is estimated that there are more than 2 million Pennsylvanians without access to a retirement plan, and those employees would now have access to a voluntary plan that sets them on a path to a more secure retirement.”
According to Mullins, Keystone Saves is designed to maximize employee choice and control while minimizing any burden on employers. Under Keystone Saves, employees could:
• Set their own contribution levels.
• Increase or decrease their deductions.
• Make investment choices.
• Leave the program at any time.
• Opt out altogether
Employees could also choose to use account and investment options selected by the program. The accounts would also be portable, so employees can continue saving even when they change jobs.
“Since taking office as the Commonwealth’s chief financial officer, I’ve consistently highlighted the huge impact that the retirement savings crisis will have on our state budget,” Pennsylvania Treasurer Stacy Garrity said. “Keystone Saves is a win-win-win. Taxpayers save billions of dollars, employers get to offer a great benefit, and hardworking Pennsylvanians get an easy way to save for retirement. If we do nothing, unprepared retirees will cost taxpayers more than $1 billion every year. Keystone Saves – which has strong bipartisan support – is a business-friendly way to tackle this problem and help people save for their own retirement.”
"The workforce problems we face in Pennsylvania have been especially hard on our small business and manufacturing communities. The Northeast Pennsylvania Manufacturers & Employers Association supports the Keystone Saves bill because it gives a lifeline to small businesses that can’t afford or don’t have the capacity to administer retirement plans for their employees. Having an extremely low-maintenance way to offer a plan will give the smaller players a better shot to compete with corporations for prospective workers,” said Darlene J. Robbins, president of the Northeast Pennsylvania Manufacturers and Employers Council.
“As we age, our needs for care grow, which is why it's important for all generations to be financially prepared to meet those needs,” said Zach Shamberg, president and CEO of the Pennsylvania Health Care Association. “Right now, 81% of skilled nursing care in Pennsylvania is paid for by taxpayers through social services, including the state’s Medicaid program – a government service that falls short of reimbursing for the full cost of care. Dependence on an unsustainable model will harm access to care for seniors. The Keystone Saves program can serve as another savings option, directly reaching workers, that will further help Pennsylvanians prepare for the future they need to be thinking about today.”
“As a medium sized employer, I know firsthand the financial challenges of providing retirement solutions for the people who work with me every day. I also feel responsible for individuals who get up every day, do their very best, so I want to be sure I’m providing them with as much of a safety net as possible,” said Walt Rowen, president of Susquehanna Glass Co. “The Pennsylvania Keystone Saves Program can change that and is an all-around win for businesses and employees. It's just the type of innovative solution we need that allows us to support our employees without simultaneously putting ourselves or company on the line for obligations we may be unable to meet. Keystone Saves will help Pennsylvanians build a stronger future.”