A private-sector auto-IRA bill introduced in Delaware's House of Representatives proposes the establishment of a retirement-savings program for workers in the state who currently have no access to an employer-sponsored plan.
The bill, HB 205, establishes the Delaware Expanding Access for Retirement and Necessary Savings program, which would allow small businesses with five or more employees who currently do not have a retirement program to enroll in this state-sponsored retirement program.
Workers with participating employers would then be automatically enrolled in the program.
"If the past year has taught us anything, it's that the future is unpredictable," said Colleen Davis, Delaware state treasurer, in a news release Thursday. "I want to do everything I can to help Delawareans make retirement more secure without putting undue burden on employers."
According to Ms. Davis, Delaware had been one of just five states that had not taken any action to consider, introduce or pass legislation establishing a statewide auto-IRA program.
The bill specifies the default contribution would be no more than 6% and no less than 3% of employee compensation and also creates a seven-person board to oversee the initial design and implementation of EARNS. That board has discretion over the introduction of any auto-escalation features, the news release said.
The goal is to have the program live by Jan. 1, 2025, and the initial board disbanded and replaced by a permanent Plans Management Board by Dec. 31, 2025.
Larry Lambert, state representative and sponsor of the bill, said in a phone interview that the bill reflects a need that arisen because over half of Delaware residents do not have an employer-sponsored retirement plan.
“Where we have the concern and fear also matching with the lack of economic opportunity, Delware EARNS solves that issue,” he said. The bill is being reviewed by the House’s Labor Committee, and he said he hopes to have the bill passed by the end of the current session on June 30.
Ms. Davis, and Larry Lambert, state representative and sponsor of the bill, could not be immediately reached for further information.