The Georgia Legislature recently introduced a bill that would create a defined contribution retirement plan for private-sector workers who lack access to employer-sponsored plans.
The bill would establish the “Peach State Saves” program, a state-sponsored retirement savings plan designed to provide a voluntary individual retirement account option for workers in Georgia. The program would automatically enroll covered employees of businesses with at least five employees in a Roth IRA at a default 5% contribution rate.
The program would be administered by a board of trustees consisting of board members of the $16 billion Georgia Employees' Retirement System, Atlanta, and three other members appointed by the governor with expertise in retirement, investments or small business. Among other features, the plan would include voluntary participation, no employer contributions and professionally managed investment options.
The implementation is expected to be phased in, with full rollout targeted for completion by Jan. 1, 2028.
The Georgia chapter of the AARP is encouraging the state’s lawmakers to pass the bill, citing that some 1.7 million Georgians earning less than $50,000 annually currently have no access to a retirement savings plan through their employers. In addition, almost 375,000 employees in Georgia making more than $50,000 a year also do not have access to a workplace plan.
AARP also said in a news release that the proposed plan would offer “a way for Georgians to save on the job while reducing their reliance on taxpayer-funded programs later in life.”
“Peach State Saves plans are an innovative solution to the retirement-saving crisis that provides a no-cost, plug-and-play retirement savings option for businesses and helps workers grow the retirement savings they need to take control of the future,” said Alice Bennett, state advocacy director for AARP Georgia, in the news release. “It empowers Georgians to save as much or as little as they want in their accounts through automatic deductions from their paychecks, and they can take it from job to job.”
One of the bill’s sponsors, Republican state Sen. Chuck Hufstetler, chair of the Finance Committee, said in the AARP release.: “I am a well-known fiscal conservative. It is my belief that there should be government intervention only as a last resort. And that is why I fully believe in this program, which is controlled by private enterprise and employees. This program is not mandatory. It preserves our freedoms while addressing a major societal need: inadequate retirement savings by some of our hardest working citizens.”
A number of other states have already established state-sponsored employee retirement plans, including CalSavers, through which employees in California can contribute to a Roth IRA. Colorado has the Colorado Secure Savings Program, while Connecticut boasts a program called MyCTSavings.
Moreover in June, Colorado SecureSavings formed a partnership with Vermont’s public retirement savings program, VT Saves, which added Vermont to the Partnership for a Dignified Retirement, an interstate consortium of state-run auto-IRA retirement savings programs that also includes Delaware and Maine.
According to Georgetown University Center for Retirement Initiatives, as of Jan. 1, there are 20 states that have enacted state retirement programs for private-sector workers, while 17 of these states are auto-IRA program states.
However, according to Pew Charitable Trusts, an estimated 56 million private-sector workers in the U.S. (or about one-third of the total) have no retirement plan from their employers.
