MN seeks to reverse trend of disappearing pension schemes / Public News Service

This week, a Minnesota Senate committee will examine a plan that proponents say would make it easier for small-business workers to have retirement savings plans.

The bill responds to concerns about a growing savings gap. The Minnesota Secure Choice Retirement Act would provide automatic payroll deduction, with collected retirement funds managed by a state board. Workers would be able to register and no employer contribution would be required.

Cathy McLeer, state director of AARP Minnesota, which supports the proposal, said it would help those without a nest egg take control of their financial outlook as they age.

“We know there have been cutbacks and employer-sponsored pensions,” McLeer pointed out. “We know that a lack of savings really impacts a person’s ability to achieve that secure retirement.”

AARP said nearly a third of workers in Minnesota don’t have access to a pension plan through their jobs. And more than 42% of Minnesota retirees depend on Social Security for half of their income.

The proposal has already been launched. We don’t know how far it could go this session. Opposition in other states has focused on the impact on private sector plan providers.

Proponents of the bill say it can also make small businesses more competitive, by eliminating the costs of setting up a pension plan for staff.

Erik Forsberg, president and CEO of Overlord Hospitality, which operates a handful of restaurants in the Twin Cities, said this could result in not having to spend as much time and energy on recruitment and retention. workers.

“Hiring and training and all that expensive stuff, in any industry,” observed Forsberg. “When you come into our industry and there’s so much turnover, it can really add up.”

Forsberg added that many people can pursue careers in the hospitality industry, but many outside factors must be weighed. He thinks putting retirement savings on their radar would be a huge plus.

“They need to focus on things like transportation and childcare, but when it comes to planning your future, that’s usually not part of their conversation,” Forsberg explained.

Disclosure: AARP Minnesota contributes to our fund for reporting on policy and budget priorities, consumer issues, health issues, and seniors’ issues. If you would like to help support news in the public interest, click here.

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