AARP APPLAUDS SENATE LABOR COMMITTEE VOTE PASSING THE “NJ SECURE CHOICE SAVINGS PROGRAM ACT.”

Momentum Builds in Support of a State-Sponsored Retirement Savings Program

 for Garden State Workers

TRENTON, NJ – December 4, 2018  — AARP NJ applauds yesterday’s bi-partisan action by the NJ Senate Labor Committee to pass S2891, by a vote of 4 to 1. AARP NJ Members attended hearings and meetings in support of the legislation. The “NJ Secure Choice Savings Program Act” (S2891/A4134), a public-private partnership, would create a state-sponsored, professionally managed retirement savings program for private sector workers who do not have a retirement savings plan at work. The legislation has been referred to the Senate Budget and Appropriations and Assembly Appropriations Committees.

Senators Joseph Lagana (D-38) and Troy Singleton (D-7) are the prime Senate sponsors of S2891. Assemblymen Roy Freiman (D-16), and Raj Mukherji (D-33) along with Assemblywoman Carol Murphy (D-7) are the prime sponsors in the NJ General Assembly bill, A4134.

New Jersey is facing a retirement crisis. The average Social Security benefit is about $19,000 a year, while on average older New Jersey families spend $23,000 a year on food, utilities, and health care alone. Social Security was never intended to be a person’s sole source of income in retirement, yet in 2012, nearly one in four older New Jersey citizens relied on Social Security for 90% or more of their income. At this rate, one out of every two middle-class retirees will be unable to afford their basic needs in retirement- things like medicine, utilities, and rent.

A key barrier to building personal savings is access to a retirement savings plan at work. A staggering 53% of NJ’s private sector-employees – 1,728,000 New Jersey workers – do not have access to a retirement savings plan at work. 70-80% of low-Income NJ workers don’t have access to an employer retirement plan. 65% of workers age 18-34 do not have access to a retirement savings plan at work. Fewer than 5% of workers will go out on their own and set up an IRA or other savings plan, compared with over 71% who participate when a plan is available at work.

“Making it easier for people to save their own money for retirement isn’t just the right thing to do – it’s also fiscally responsible,” remarked Sarah Mysiewicz Gill, AARP’s Senior Legislative Representative, who testified at the Senate Labor Committee hearing yesterday. “By affording workers access to a simple way to save for retirement, fewer households will need to rely on social services, producing savings for all taxpayers.

Secure Choice would provide an essential tool for small businesses by providing a retirement program for Garden State employers who don’t currently offer a retirement savings option for their employees. The proposal creates an easy, voluntary way for workers to save directly from their paychecks. The professionally managed program gives private sector employees of all ages in New Jersey the opportunity to grow their savings so they can take control of their future.

Recently, AARP NJ released findings from its independent commissioned retirement security opinion poll of registered voters ages 18-64. The results showed that the vast majority of Garden State voters do not feel financially prepared for retirement, anxious about retirement security and an even larger percentage support a program that would provide a public-private state retirement saving option.

The poll of 500 registered voters ages 18-64 in New Jersey found that:

o   Over 80% percent of respondents do not feel financially prepared for retirement.

o   72% percent of NJ voters are ANXIOUS about NOT HAVING ENOUGH MONEY FOR RETIREMENT.

o   When asked about saving for retirement, 88% percent of respondents said they wished they had saved more.

o   82% percent are worried about their standard of living in retirement in the face of increased costs of living.

o   87% percent of voters agree that lawmakers should support such a private-public retirement savings program option.

o   Over 85% percent would take advantage of a workplace savings option if it were available.

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