The Legislature has sent a bill to Gov. Phil Scott that would create a publicly administered retirement plan for employees of small businesses by 2019.
The Legislature passed the public retirement plan as part of this year’s comprehensive economic development bill, S.135. The bill passed both the House and Senate on Thursday with only one person from both chambers voting against.
The specifics of the program are largely the same as what was in the bill that the Senate passed in April. Lawmakers said at the time the plan must be enacted by 2019, but could be set up as soon as 2018.
Initially, the retirement program would be available to employers with fewer than 50 employees and who do not currently offer a plan to their employees. Employers could voluntarily sign up for the plan, and then their employees would be able to opt-out if they don’t want to participate.
Beth Pearce, the state treasurer, has been leading a work group for the past three years to set up the retirement program, called the Green Mountain Secure Retirement Plan. She praised the bill’s passage on Friday.
“Every Vermonter deserves an opportunity for a lifetime of financial wellbeing,” Pearce said in a statement. “The passage of this bill will allow the State to make substantive steps towards implementing a voluntary retirement program for Vermonters who currently lack access to employer-sponsored retirement plans.”
“Today 104,000 Vermonters do not have access to employer-sponsored retirement plans,” she said. “I look forward to working with businesses, advocacy groups, and other stakeholders to implement a program that works for all Vermonters.”
Lindsay DesLauriers, the state director for Main Street Alliance, a group that represents small businesses, also praised the passage of the bill. She said the program allows workers to have retirement benefits without placing an administrative burden on employers.
“Most small businesses do not have the investment experience or time to research available private retirement plans and make a decision about which plan is the best choice for their employees,” DesLauriers said in a statement.
“The (retirement plan) will enable employees of small businesses and small business owners themselves the opportunity to work toward economic security later in life through secure retirement savings,” she added.
S.135, which has more than a dozen sections, also creates a legislative study committee to review raising the minimum wage and what impacts it would have on the so-called benefits cliff, in which low-income people are discouraged from getting raises if it means losing benefits like subsidized health care and child care.
The bill also includes several of Scott’s economic development priorities, including an expansion of tax credits for people who build affordable housing. Those priorities will not go into effect unless Scott signs a budget.