N.C. House lawmakers want to create a new state-run retirement savings program for workers whose employers don’t offer that benefit.
Rep. Jarrod Lowery, R-Robeson, is sponsoring the measure. He pointed out that half of private sector workers – nearly 2 million people in North Carolina – don’t have access to retirement benefits through their jobs.
"Most work for small businesses," he said during a news conference Wednesday. "We’re talking about working class North Carolinians here. They’re our plumbers, our barbers, our sheet rockers, mechanics, landscapers, line workers — you know, people who truly help and keep North Carolina moving. And what this really means is they’re unprepared for their future retirement years, their golden years."
The proposed “North Carolina Work and Save” program would let workers use payroll deductions to set aside money for retirement. It’s similar to the 529 college savings account program. Employers who want to match their workers' retirement contributions would still need to use existing private 401(k)-style options.
Similar legislation was filed two years ago in the House, but it didn't become law — in part because some financial services businesses worried the state-run savings program could compete with their offerings.
Lowery said he doesn't think that should be a concern, because research shows people are 15 times more likely to save for retirement if they can do it through payroll deductions.
"This is really tapping into a market that has nowhere else to go," he said. "This is going to be the best option for those North Carolinians to take charge of their financial future."
About 16 other states have a similar program, which has backing from the AARP. AARP state director Michael Olender said the program could save the state billions of dollars in government assistance programs that older folks wouldn't need if they had adequate retirement savings.
A private company would run the program with oversight from a state board. The bill is expected to get its first committee hearing next week.
