New Public Sector Retirement Savings Plan Approved by Senate

The budget committee of the Senate has finally given its approval to the bill that is destined to create a long lasting retirement savings plan for the workers that are employed in the private sector. This will ideally be applicable to those workplaces where there are no employer-sponsored plans in New Jersey.

A new retirement savings plan:

The bill would make it a requirement for all those companies that have around 25 companies to offer a retirement plan known as the “Secure choice” if of-course they don’t already have a plan. Apart from this, if you are a smaller company and want to avail this opportunity then you are also more than welcome.

The bill was cleared by the Senate Appropriations and budget committee recently with a vote distribution of 9-3-1.

This bill has some similarities with the already available retirement savings plans. Just as in a 401(k) employers would be required to set up a deduction on the pay check of all the employees. This deduction would amount to 3 percent of the income and would go directly in to the retirement fund accounts.

The need of this plan was eminent in the state for quite some time now. There are around 1.7 million people only in the state of New Jersey who don’t have an employer-sponsored retirement plan available and according to researchers, around 31 percent of the federal employees have not got a retirement account set up either. This program is set to be put into practice within around 2 years and is expected to transform the way retirement plans are dealt with in the country. When people of a country are naïve because they are not prudent enough then it becomes the responsibility of the government to provide them with the insight to think in a broader way and this is a great step taken by the Senate in this regard.