FeedsLegislature considers bill to help with retirement savings
State Rep. Marc Corriveau (D-Northville) said he hopes legislation introduced recently will help Michigan residents plan for the future.
The plan would provide 401k style retirement plans to employees in small businesses that would not otherwise have such an opportunity, he said.
“It’s one of the things we’re trying to do to help small businesses stay competitive,” he said.
Under the plan, the state would work with a private investment planner to set up the 401ks. They would be open to all businesses and people who are self-employed. The state would front the money to set it up—only about $560,000, according to Corriveau—and recoup the funds as the plan grows. Employees who take part in it would be able to transfer the account should they take another job in Michigan. It would be modeled after the state 401k system.
Small businesses are the backbone of the economy, according to Corriveau, who pointed out that many are ‘mom-and-pop’ operations that can’t always offer the benefits that larger companies can.
“Investment plans can be out of reach, expensive and difficult to manage for individuals—this plan will bring retirement savings into reach for many of our workers.”
He said about four in 10 workers don’t save for retirement at a time when 90 percent of Americans say they have financial concerns about their retirement. Social Security only provides about 40 percent of pre-retirement income, he added, when 70 percent is required for a comfortable golden age period. When offered a 401k plan, eight of 10 workers participate.
“It’s really gives them a sense of security,” Corriveau said.
Wayne Mayor Al Haidous, a small business owner, said he would favor such legislation.
“Anything we can do to make retirement more affordable to the public is less of a burden on the state and the local authorities,” he said. “If (citizens) don’t have it, guess who picks up the bill?
“It’s a step in the right direction for the future,” Haidous added.
The plan would still have to be approved by the House of Representatives and the Michigan Senate and signed by the governor.
Corriveau said he thinks it has a good chance.
“It’s such a small expense that could have such a huge, long-term benefit,” he said. “I can’t imagine that it wouldn’t have bi-partisan support.”
