The Pew Charitable Trusts and other members of the Keystone Saves Coalition sent a letter Feb. 14 to members of the Pennsylvania House Commerce Committee, urging support for House Bill 2156, which would create the Keystone Saves program to help more workers in the state save for retirement.
In the letter, members of the coalition representing businesses, human service and civic organizations, nonprofits, and millions of older Pennsylvanians, outlined how the program would give businesses a no-cost retirement benefit for their workers, help hardworking Pennsylvanians secure their financial futures, and help reduce the $14.3 billion state fiscal burden that would result from insufficient retirement savings.
The Keystone Saves bill, authored by Representatives Tracy Pennycuick (R-Montgomery) and Mike Driscoll (D-Philadelphia), would create a program that relies on voluntary regular payroll contributions to fund individual retirement accounts (IRAs). Administrative and investment fees would be kept low because of the economies of scale produced by a statewide program.
In their letter, coalition members state that:
“This measure will enable employers—without charge or out-of-pocket cost—to provide access to a state-facilitated retirement program to their employees by setting up a simple payroll deduction. Employees will have the option to make regular payroll contributions to fund individual retirement accounts (IRAs). Keystone Saves would be a public-private partnership in which IRAs are professionally managed by a third-party financial firm overseen by the state, similar to the state’s 529 College Savings Plan.
“More than 2 million eligible Pennsylvanians currently lack access to retirement savings plans through their jobs. Studies show individuals are 15 times more likely to save for retirement when they have a tool available through their workplace, and they are more likely to use financial planning tools when they have a retirement plan at their job.”