Massachusetts is moving to require participation in state-run 401(k) plans for companies that fail to offer private accounts. High-profile Secretary of the Commonwealth William Galvin, who has been compared to Elliot Spitzer of old in his zeal for regulatory oversight, “urged state legislators to require companies that don’t offer an employee retirement plan to participate in a state-administered program to let workers save for their future,” according to The Boston Globe.
“The bill under consideration would apply to companies with more than 25 employees and is one of numerous similar proposals by officials across the country, in the wake of Obama administration efforts to make workplace-based retirement savings accounts more available,” the paper reported last week.
Galvin, who testified before the Legislatures’s Joint Committee on Financial Services, said in an interview after the hearing: “This isn’t simply a nice thing to do or a good thing to do — it’s a necessary thing to do.”
Many people don’t have an “organized way to save for their retirement,’’ Galvin added. “If we don’t do something, ultimately this will become a government burden.”
“About half of all workers in the country don’t have access to a retirement plan,’’ Anek Belbase, a senior research project manager at Boston College’s Center for Retirement Research, told the Globe.
He said basic plans that resemble IRAs or 401(k)s for employees at small companies could give millions of workers their first opportunity to save for retirement with the simplicity of payroll deductions.