Maine legislature passes auto IRA bill
Jared Reynold is the co-founder and senior wealth adviser at WR Wealth Planners in Columbia, Missouri.
The Maine Retirement Savings Program would allow private-sector workers to contribute to a Roth IRA from their paychecks. The bill has gone to Maine Gov. Janet Mills.
The Maine House and Senate both passed a bill last Thursday that would create the Maine Retirement Savings Program for private-sector workers and allow them to contribute to a Roth IRA from their paychecks. The bill now goes to Maine Gov. Janet Mills, who has 10 days to sign it, veto it or allow it to become law without her signature..
Under the measure, introduced in the Maine Senate by Sen. Eloise Vitelli, D-Arrowsic, companies that don’t have a retirement plan will make deductions from their employees’ paychecks that go into a Roth IRA. Companies don’t match the employees’ contributions. The Roth IRA account would follow workers from job to job until they reach retirement.
“Mainers are known for our incredible work ethic. It seems only fair that people who have worked hard their whole life should be able to enjoy their golden years on stable financial footing,” Vitelli said in a press release. “This bill will help more Maine workers save what they need for a safe and healthy retirement.”
The bill would require companies with 25 or more workers to offer the program by April 1, 2023.
According to data from AARP, approximately 46% of private-sector workers in Maine — about 235,000 people — do not have access to an employer-sponsored retirement savings program. Nationally, 26% of working-age adults say they have no retirement savings at all.
New York state moved closer to an auto IRA program earlier this month when its Senate passed a bill to amend the forthcoming program. There are a handful of auto IRA programs in the U.S., the most notable of which is California’s CalSavers, which has 11,000 participating employers, representing 350,000 workers and about $78 million in assets.
Other states, including Illinois and Oregon, also have automatic IRA programs for private-sector workers.
[More: Oklahoma bills show auto-IRAs making headway in non-blue states]
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