Vitelli, AARP Maine present bill to help more workers plan and save for retirement

Assistant Senate Majority Leader Eloise Vitelli, D-Arrowsic, was joined by representatives of AARP Maine and a national expert for a press conference to kick off a legislative effort to promote retirement savings and financial security in Maine.

“Not too long ago, a person who worked their whole life could retire with the security of a reliable pension. But now, more and more retirees are trying to live on Social Security payments alone. It’s not enough,” said Sen. Vitelli. “We have an opportunity to turn the tide and help all Maine workers save for retirement. Our goal is to create a program that’s as easy to use as possible, for both employers and workers. With the help of both local and national experts, I believe we’ll be able to achieve that goal.”

Sen. Vitelli is sponsoring LD 594, “An Act To Promote Individual Savings Accounts through a Public-Private Partnership,” the Work and Save bill, which would offer a state-run retirement savings plan to Maine workers who do not have one available through their employer. The bill was carried over from the first regular session of the 129th Legislature. Over the past six months several stakeholders have held a series of meetings to improve and strengthen the bill.

The proposed program would allow workers who do not have access to a retirement savings account through their employer to set up their own account, with automatic deductions from their paychecks. The plan would require no financial contributions from employers, and would work through existing payroll systems. Six other states have similar programs.

Sen. Vitelli was joined Tuesday by Lori Parham, State Director of AARP Maine; Barbara Babkirk, an AARP member and owner of Heart at Work Associates; and Mark Iwry, nonresident Senior Fellow at the Brookings Institution and former Senior Advisor to the Secretary of the Treasury. Babkirk specializes in helping Mainers 50 years of age and older find new employment opportunities.

“This is all about the people left behind, the people who haven’t had an easy way to save,” said Iwry, who is the principal architect of the state-facilitated IRA concept and related Work and Save legislation.

According to data from AARP, approximately 46 percent of private-sector workers in Maine — about 235,000 people — do not have access to an employer-sponsored retirement savings program. Nationally, 26 percent of working-age adults say they have no retirement savings at all.

A 2017 report published by the Margaret Chase Smith Policy Center at the University of Maine states that, “Inadequate savings for retirement creates fiscal costs due to increased elderly reliance on public assistance … Simulations show that increasing retirement income through greater preretirement savings can substantially reduce the need for taxpayer contributions for public assistance.”

A recording of the press event, which was streamed live by AARP Maine, can be found online here.