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Work and Save LD 1318: Help Us Spread the Word

Written by Alyra Donisvitch | Published on February 11, 2016
Person writing with white pen in notebook

What is Work and Save?

Work and Save is the short/working title of a bill before the Maine Legislature that would make it easier for employees of Maine’s small businesses to save for retirement.  Representative Henry Beck of Waterville is the primary sponsor.

The official title of LD 1318 is “An Act to Promote individual Private Savings Accounts through a Public Private Partnership.” The bill had a public hearing before the Insurance and Financial Services Committee last year and was held over.

A stakeholder group, led by AARP and New Ventures Maine, has been working to amend the bill based on feedback received at the bill hearing and over the summer from the financial sector and other interested parties.

A revised bill will be before the committee for a Work Session in the next few weeks.

How Would Work and Save work?

While not yet in final form, the main idea is to promote ‘IRA’ like retirement savings via payroll deductions for individual employees of small businesses who do not currently offer a retirement savings plan.

Eligible small employers include the self-employed and sole proprietors and their employees.

Employees would have to ‘opt-out’ of the plan – this makes it more likely that people will save, while still allowing individuals to choose not to participate.

While employers will be encouraged  to make these accounts available to their employees, they will not be required to contribute to the accounts.

An individual’s retirement account will be portable – it will go with them when they change jobs, making it easier for individuals to accumulate savings over time.

The suggested default amount to be set aside each pay period is 3% of earnings. Employees can change the percentage to be more or less.

Why do we Need This?

There is a retirement savings gap in Maine and nationally.

One in three Maine seniors rely only on Social Security in retirement. At an average of $1,100 a month, this is not enough to cover basic expenses for many elderly. Women are more likely to depend on social security income; they live longer and more likely to be poor in old age.

Less than half of businesses with 10 -49 employees offer retirement plans; among businesses with 10 or fewer employees, only 28% offer retirement savings plans. Combined, more than 254,000 Maine workers do not have access to a retirement plan through their work.

Among individuals served by New Ventures Maine in recent years,  only 36% had any retirement savings and 2/3 of those were over 45 years of age.

Nationally, 45% of working age households (ages 25-64) do not have retirement saving accounts.

Low-wage workers, workers in service and retail industries, are less likely to have retirement savings.

Work and Save proposals are being introduced in many states around the country as a way to address the retirement savings gap.


What You Can do – Take Action

The committee has heard from bankers, financial advisors and insurance industry representatives and small business owners.

Now they need to hear from you.

  • Write, email or call your Legislator and members of the Insurance and Financial Services Committee and let them know you support efforts to make retirement savings more accessible, simpler and more affordable for Maine workers.  Ask them to support LD 1318.
  • Find your Legislator here.
  • Find members of the Insurance and Financial Services Committee here

Talking Points to Include in Your Story/Message:

  • The town you live in.
  • Your age – roughly  – “in my mid-forties” is fine. It puts you in relation to possible retirement age.
  • When you plan or would like to retire –  in 5 years, 10, 15 years.
  • Do you have a retirement savings account? Do you feel it is adequate? Is your employer contributing?
  • If you do not have retirement savings, or are concerned you will not have enough set aside, what stands in your way? – don’t know how to set it up, not sure how much I can or should save etc.
  • Do you know someone who is living only on social security income? How are they faring?
  • If your employer gave you the chance to save for retirement through an opt-out payroll deduction, how likely are you to take advantage of that?

General guidelines for communicating with Legislators:

  • Be polite and courteous.
  • If speaking to them in person or on the phone, ask if you can have just a few minutes of their time, let them know why you are calling and then be brief.
  • Ask for their thoughts or concerns on the issue. Conversations are two way streets.
  • Thank them for their time and for their service.

If you want to calculate how much you might want to set aside in a retirement account, find a calculator here.