HARRISBURG, PA – A piece of legislation known as Keystone Saves Retirement Accounts was brought into focus during a House Majority Policy Committee hearing on Wednesday. Proposed by Rep. Kyle Mullins, this initiative aims to bridge the retirement savings gap for approximately 2 million workers in Pennsylvania who lack access to employer-sponsored retirement plans.
Keystone Saves Retirement Accounts seeks to offer employees a straightforward method to contribute to retirement savings directly from their paychecks, tax-free, promising better returns than traditional Individual Retirement Accounts (IRAs). The bill, H.B. 577, which saw bipartisan backing in the House last May, is currently stalled in the Senate.
The lack of accessible retirement savings options poses a significant challenge, not just for Pennsylvania’s workforce but also for the state’s economy. According to Mullins, failing to address this “retirement security crisis” could burden Pennsylvania with nearly $20 billion in social safety net program costs by 2040. Mullins argues that Keystone Saves Retirement Accounts can alleviate some of the pressures on small business owners by providing a cost-effective retirement savings solution.
Wednesday’s policy hearing featured insights from experts including John Scott of Pew Charitable Trusts, Nora Dowd Eisenhower of AARP Pennsylvania, and David Gonzalez of York County Economic Alliance. They highlighted the critical need for affordable retirement savings options, particularly for employees of small businesses which often cannot afford to offer traditional retirement plans like 401(k)s.
House Majority Policy Committee Chairman Ryan Bizzarro emphasized that Keystone Saves Retirement Accounts is designed as a public-private partnership under state law, providing a viable option rather than a mandate for small businesses. Evidence from other states, notably Illinois, suggests that such savings programs can successfully fill the retirement planning void for many workers.
The importance of offering alternative retirement savings avenues has never been more apparent, with recent polls indicating a strong public favorability towards initiatives like Keystone Saves Retirement Accounts. Additionally, concerns over the future viability of Social Security underscore the urgent need for additional retirement options.
Keystone Saves Retirement Accounts represent a significant step forward in ensuring that all Pennsylvanians have the opportunity for a secure and dignified retirement. By addressing the retirement savings gap now, Pennsylvania can prevent future financial strain on both its citizens and state resources, demonstrating a proactive commitment to the well-being of its workforce and the economic health of the state.
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