Vitelli introduces bill to help more Maine workers save for retirement

AUGUSTA — Sen. Eloise Vitelli, D-Arrowsic, has introduced legislation that would help more Mainers save for retirement. LD 594, “An Act To Promote Individual Savings Accounts through a Public-Private Partnership,” received a public hearing before the Legislature’s Committee on Health Coverage, Insurance and Financial Services on Thursday.

“Too many Mainers who have worked hard all their whole lives find themselves in difficult or even dire financial circumstances in their later years,” said Sen. Vitelli. “With Maine’s aging population, helping workers establish a retirement savings account is a smart, common-sense move to help ease that burden.”

The bill would establish the Maine Retirement Savings Board, which would be authorized to develop a program to offer individual defined contribution retirement accounts for Maine workers who are self-employed or who do not have access to a qualified retirement plan through their employers.

As guaranteed pensions shrink and disappear, the number of retirees without an adequate financial safety net is certain to rise. That means it’s increasingly necessary for Maine workers to establish and contribute to a retirement savings account.

According to Ca$h Maine, approximately 254,000 Maine workers do not have access to a retirement savings plan through their employer, and 1 in 3 Maine retirees rely exclusively on Social Security for income, which pays on average only about $1,100 per month. Without enough of a financial safety net, many aging Mainers face the very real possibility of running out of money during their retirement or seeing their expenses outpace their fixed income.

An unexpected shock, such as from a health problem or other major life change, can send retiree’s personal finances into a downward spiral. Loss of a spouse or entering an assisted-living facility can have significant impact on a retiree’s stability.  Research estimates that 67 percent of men and 70 percent of women age 70 and over will experience one or more financial shocks in a nine-year period. Having a savings account can help soften the impact of such an event and make sure retirees aren’t forced into poverty and reliance on government welfare programs.

LD 594 faces more action in the committee and votes before the Maine House and Senate.