Tag Archives for Secure Choice

Rhode Island moves to assist in planning for retirement with Secure Choice

Published in RINewsToday on July 9, 2024

An AARP study recently released tells us that it’s not easy being in your 50s and not having planned for your retirement. According to the study’s findings, 20% of adults ages 50+ have no retirement savings, and more than half (61%) are worried they will not have enough money to support them in retirement. The survey’s findings indicate a decline in the overall sense of financial security among men, 42% of whom describe their financial situation as “fair” or “poor,” up from 34% in the beginning of 2022. However, roughly 40% of men who are regularly saving for retirement believe they are saving enough, compared to just 30% of women.

Retirement not an option for many

“Every adult in America deserves to retire with dignity and financial security. Yet far too many people lack access to retirement savings options and this, coupled with higher prices, is making it increasingly hard for people to choose when to retire,” said Indira Venkateswaran, AARP Senior Vice President of Research in an April 24 statement announcing the findings of the retirement survey. “Everyday expenses continue to be the top barrier to saving more for retirement, and some older Americans say that they never expect to retire,” says Venkateswaran.

Credit card debt is out of control, say the researchers. Nearly one-third (30%) of older adults who carry over a credit card balance from month-to-month report carrying a balance of $10K or more, while 12% described their balance as $20K or more, up from 8% roughly a year ago, they say.

Despite this, 33% of respondents ages 50+ believe their finances will be better 12 months from now, but the lingering effects of inflation and high costs are still apparent to them.

More than one-third (37%) of the respondents worry about covering basic expenses, such as food and housing. More than 26% worry about covering family caregiving costs. The survey’s findings indicate that seven in 10 (70%) worry about prices rising faster than their income. Over 26 % of people who are not yet retired say they expect to never retire.  No rocking chairs on the porch or travel for these individuals.

Nancy LeaMond, AARP Executive Vice President and Chief Advocacy & Engagement Officer, warns that the nation faces a “serious retirement crisis.”  She says, “AARP has a long history of supporting legislation to expand access to retirement savings, but Congress must act more swiftly to provide the financial support older Americans need and deserve.”

Congress is currently considering different pieces of legislation that would expand retirement security, including the bipartisan Retirement Savings for Americans Act of 2023, which would provide retirement savings accounts to eligible workers without employer-sponsored retirement plans, and the Automatic IRA Act of 2024. 

LeaMond says that AARP has successfully worked with 19 states to create state programs to make it easier for people whose employers don’t offer a retirement plan to be able to save for their future. “But about two-thirds of states have yet to act, and we await action from the federal government,” says LeaMond.

Americans are 15 times more likely to save for retirement when they have access to a workplace plan. Yet nearly 57 million seniors do not have access to a retirement plan at work, according to AARP. Eight states have auto-IRA programs up and running: California, Colorado, Connecticut, Illinois, Maine, Maryland, Oregon, and Virginia, while Massachusetts has a multiple employer plan in place. Ten other states have passed legislation and are at various stages of implementation, including Washington, where auto-IRA legislation was signed into law last month.  

Rhode Island now joins the ranks, offering auto-IRA programs

Over two months after the release of AARP’s retirement study, on June 27, with Gov. Dan McKee signing legislation (S 2045 aa, H 7127 aa), Rhode Island joins 19 other states in enacting legislation to help private-sector workers save for retirement through their jobs.

Rhode Island’s retirement legislation was introduced by Sen. Meghan Kallman (Dist. 15, Providence, Pawtucket) and Rep. Evan P. Shanley (Dist. 24, Warwick).

Among the biggest beneficiaries of the auto-IRA programs are small businesses and their employees. Approximately 70% of workers at companies with fewer than ten employees have no access to retirement savings through work.

“Most of us will reach an age when we will want to stop working, however, for thousands of workers in Rhode Islander this is not an option because they do not have money set aside for retirement,” said Kallman. “Secure Choice is a convenient, portable, voluntary IRA managed by the state that works directly through workers’ jobs; essentially a public-option IRA for those whose employers do not offer one,” she says.

Adds Shanley, “When I talk to small businesses in my community, they really care about their staff and want their workers to be able to save for retirement. But small business owners can’t be experts in everything and often don’t know where to start with offering retirement savings. This bill gives them a way to support their workers and gives workers a chance to save,” he said.

“Hardworking Rhode Islanders deserve to retire with dignity and that is why we are thrilled to celebrate the passage of Secure Choice,” said Catherine Taylor, AARP Rhode Island state director.

“The bill passed with strong bipartisan support after four years of AARP advocacy,” adds Matthew Netto, AARP Rhode Island advocacy director. The state is eyeing a 2026 launch of the program, which is still in the planning stages.

The Secure Choice Program would create a state sponsored retirement savings program (Auto-IRA) that will be accessible to the over 172,000 private sector employees in Rhode Island that do not have access to a plan through their employer.

Secure Choice is designed to be no cost and liability free for businesses. Employees would be automatically enrolled with the ability to opt out anytime. The savings would belong to the employee – they would be able to choose how much to contribute via automatic payroll deduction and take it with them from job to job.

The Rhode Island Secure Choice Retirement Savings Program, the state’s auto-IRA plan administered by the office of the General Treasurer, would see retirement savings accumulated in individual accounts for the exclusive benefit of the participants or their beneficiaries. Private employees who do not already offer a retirement plan would be required to offer workers access to the Secure Choice program.

Secure Choice a great investment for Rhode Island

Under the enacted legislation, Rhode Island General Treasurer James A. Diossa, would be charged with administering contributions through payroll deductions and investing these funds in accordance with best practice for retirement savings vehicles. The act would become effective for all eligible employers within 36 months of the opening of the program enrollment following a phased implementation period.

“The Secure Choice Act is a great investment in Rhode Island families,” said Diossa. “For too long, more than 40% of private sector employees in the state have lacked the assurance of adequate retirement savings. Secure Choice will help transform the retirement landscape by offering the opportunity to prepare for retirement,” he says.

Said Kristina Contreras Fox, director of policy and advocacy at the Rhode Island Black Business Association, “The Rhode Island Black Business Association is thrilled to see our General Assembly take bold action in supporting robust small business growth and closing the racial wealth gap by passing the Secure Choice Retirement Savings Act. “Small business owners have advocated for years in support of this legislation since it will help them recruit talented workers looking for good jobs not only with a living wage but also strong benefits,” she said, noting that for minority entrepreneurs, the passage of this bill also brings an added measure of support for their families.

AARP has a tool that can help calculate how much you will need in retirement with a personalized snapshot.  Go to https://www.aarp.org/membership/benefits/finance/retirement-calculator/

The legislative wish list of Rhode Island’s groups on aging

Published in RINewsToday on April 15, 2024

The Rhode Island General Assembly’s 2024 session kicked off on Jan. 2, 2024, scheduled to adjourn on June 30, 2024.  According to LegiScan, over the last three months 2,164 bills have been thrown into the legislative hopper.

“The state budget will likely be voted upon by the House Finance Committee in late May or early June.  Then a week later it is considered by the full House of Representatives, followed by votes by the Senate Finance Committee and the full Senate, and the final step would be consideration by the Governor. That process is usually completed  by mid-June to late June because the new fiscal year begins on July 1.” says Larry Berman, who has served as House Communication Director for 22 legislative sessions.“

According to Berman, the Senate and House both focus on their priorities within their own chambers first, and once those bills pass, then discussions take place between the leadership teams of both chambers to finalize bills for passage in both chambers before sending them to the Governor.  That time period will be May, and well into June. 

Legislative Wish List

Aging advocates are pushing for their legislative agenda’s to be included in the House budget.  They also are carefully monitoring the status of bills that have been introduced, specifically those that will have an impact on programs and services delivered to older Rhode Islanders.

Maureen Maigret, Policy Advisor, of Senior Agenda Coalition of RI (SACRI) puts the passage of H 7333 and S 2399 on ita priority legislative list to assist financially struggling seniors and persons with disabilities on Medicare. “As many older adults are struggling financially, SACRI is prioritizing H7333 (by Rep. Karen Alzate) and S2399 (by Senator Sandra Cano) to expand the Medicare Savings Program eligibility up to $28,000. These bills would put more money in the pockets of lower-income persons not on Medicaid by covering the Medicare Part B premiums that amount to $2,100 a year and also help them with prescription drug costs,” she says.

To provide financial help to our many unpaid caregivers we also support S2375 (by Rep. Linda L. Ujifusa) and H7490 (by Rep. Susan Donovan) to create a state tax credit up to $1,000 for half the costs incurred to care for an older family member needing supports and S2121 (by Sen. Valarie J. Lawson) and H 7171 (by (by Rep. Joshua J Giraldo) to increase the Temporary Caregiver Insurance program from six to 12 weeks.

According to Maigret, there are a number of bills addressing housing issues that SACRI also supports including those to promote ADU development, funding for affordable senior housing and incorporating accessibility features into new housing.

H. 7062, sponsored by Rep. June S. Speakman has passed the House. This bill would boost hosing production by helping Rhode Islanders to develop  ADUs has been identified by as a high priority this year for House Speaker K. Joseph Shekarchi (D-Dist. 13, Warwick).

“In looking at the Governor’s State FY2025 budget we are advocating to add about $660,000 to the Office of Healthy Aging budget to increase funding to local communities to support local senior centers/programs to reach a level of $10 per each person age 65 and older in the city or town,” notes Maigret. SACRI calls for increased funding to implement the recommended increases for social and human services providers beyond the one-third level proposed by the Governor to help address the long wait list for accessing homecare services and provide more livable homecare staff wages. This is critical as the average private cost of home health aide services in RI is $36/hour, she notes.

“ As our industry continues to fight off the existential threats of inadequate funding and staffing shortages, our Association is staying laser focused on our homes receiving sufficient and sustainable financial reimbursements and supporting all initiatives to improve staff availability. Without substantive help from the General Assembly, we will continue to lose more homes and our ability to care for our most fragile RI citizens,” states John E. Gage, MBA, NHA, president and CEO of the Rhode Island Health Care Association. 

At AARP Rhode Island’s 2024 Legislative reception, State Director Catherine Taylor called for passage of H 7127 to provide an optional, voluntary Roth-IRA plan to the 172,000 Rhode Island employees who do not have access to a convenient, low-cost voluntary retirement savings plan through their employer.

The Secure Choice program, endorsed by Gov. Dan McKee and AARP Rhode Island, would be administered by the office of the General Treasurer, would see retirement savings accumulated in individual accounts for the exclusive benefit of the participants or their beneficiaries.  

The legislation has been referred to the House Finance Committee. A similar measure (S 2045) has been introduced in the upper chamber by Sen. Meghan E. Kallman.

According to Taylor, Secure Choice has been enacted in 18 states to date. In Connecticut, the program led to over 25,0000 workers saving over $19 million dollars in the first year of operation. These savings would not have been realized without Secure Choice.

Taylor also noted that Rhode Island is one of only 8 states that tax hard-earned Social Security benefits. “Our state tax on Social Security undermines the purpose of Social Security, which was designed to lift older adults out of poverty – not to fund state government,” she says.

AARP Rhode Island supports the efforts of Sen. Elaine Morgan (S 84) to completely eliminate the state tax on Social Security income and Sen. Walter Felag (S 246) to increase the thresholds to $ 110,000 for single, and $ 140,000 got joint filers, says Taylor.

“We would like to see the passage of S. 2556 [by Senators Lou Dipalma, Bridget Valverde, John Burke, and Pam Lauria] and H. 7493, sponsored by Rep. Scott Slater and Rep. Grace Diaz, that would establish a 20% add-on to the Medicaid per diem rate for nursing homes that have single-occupancy rooms and bathrooms,” says James Nyberg, executive director of LeadingAge RI.

According to Nyberg, there is a growing body of research that shows the benefits of single rooms on residents’ physical ad mental health and well-being, which was clearly exposed by the COVID-19 pandemic.  “There is also the simple fact that it promotes human dignity. Older Rhode Islanders should not have to share a bathroom and shower with strangers during a frail time of life,” he says.

“As for the budget, we want to ensure that the nursing home funding included in the Governor’s budget is maintained, and the Office of the Health Insurance Commissioner recommended rate increases be expedited, if possible, as well,” says Nyberg.

Just a Few More to Watch

Here is a sampling of other bills, of interest to aging advocates, thrown into the legislative hopper this legislative session:

Sen. Linda L. Ujifusa and Rep. Megan Cotter are sponsoring a bill (H 7208, S 2063) to provide relief to some of the state’s most vulnerable households by raising the eligibility limit and the maximum credit for the “circuit breaker” tax credit, which benefits low-income seniors and individuals with disabilities. The bills have been referred to their chamber’s Finance Committee.

The circuit breaker credit program provides an income tax credit to low-income Rhode Island homeowners and renters who are over 65 or disabled, equal to the amount that their property tax exceeds a certain percent of their income. That percent ranges from 3 to 6 percent, based on household income. In the case of renters, a figure representing 20 percent of their annual rent is used in the place of property tax in the calculation.   

The Senate approved S 2082, sponsored by Sen. Melissa A. Murray, to limit insured patients’ co-pays for supplies and equipment used to treat diabetes to $25 for a 30-day supply.

The legislation would apply to private insurers, health maintenance organizations, nonprofit hospital service or medical service corporations and the state employee health insurance plans that cover such supplies. Under the bill, beginning Jan. 1 (or, for state employees, the next time the health plan contract is purchased or renewed by the state), co-pays for insulin administration and glucose monitoring supplies shall be capped at $25 for a 30-day supply, or per item when an item is intended to be used for longer than 30 days.

During this legislative session, S 0089 and H 5417 were introduced by Senator Meghan Kallman and Rep. Evan P. Shanley and take their savings with them when they change jobs. The legislative proposals have been referred to the House Finance and Senate Committees for consideration.

For more details about legislation being considered by the Rhode Island General Assembly, go to https://legiscan.com/RI/legislation/2024.

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“Secure Choice” will help saving for retirement

Published in RINewsToday on February 20, 2023

Most Rhode Islanders save for retirement through an employer-based plan such as a pension or 401(k). But 172,000 Rhode Island workers (roughly 40 percent of the state’s workforce) do not have access to this crucial savings tool. At a Feb. 14, 2023 press conference held at the State Library, Sen. Meghan E. Kallman (D-Pawtucket, Providence) and Rep. Evan Shanley (D-Warwick, East Greenwich) were joined by General Treasurer James A. Diossa, and advocates calling for a policy fix by enacting a program called “Secure Choice.” These advocates were invited to publicly give their support: Catherine Taylor, State Director of AARP Rhode Island, the Rhode Island Black Business Association, Progreso Latino and the Hispanic Chamber of Commerce.

During early February, S 0089 and H 5417 were introduced by Sen. Meghan Kallman (D-Pawtucket, Providence) and Rep. Shanley (D-Warwick, East Greenwich) to allow employees to take their savings with them when they change jobs.  The Senate and House proposals were referred to the Senate Finance and House Committees in their respective chambers. 

At press time, Kallman withdrew S 0089 to redraft it to match the House version.  It will be reintroduced after Feb. 28 when the Rhode Island lawmakers come back from recess. At this time, the General Assembly’s House and Senate GOP caucus have no position on these legislative proposals.  

“It’s in everyone’s interest to help workers save for retirement,” said Kallman, the press conference announcing the introduction of the Secure Choice legislative proposals. “The evidence is really clear: giving workers access to pre-tax payroll deductions is the best way to encourage retirement savings. And having those savings is a big part of being able to live a comfortable and healthy retirement, which is what we want for everyone in our community,” she said.

“When I talk to small businesses in my community, they really care about their staff and want their workers to be able to save for retirement,” said Shanley, primary sponsor of the House companion measure. “But small business owners can’t be experts in everything and often don’t know where to start with offering retirement savings. This bill gives them a way to support their workers and gives workers a chance to save,” he says.

“Too many employees across the state are working day and night without the assurance of a solid financial future,” said Treasurer Diossa. “By providing workers with an optional retirement plan, the Secure Choice Act is a prime example of how government can improve the lives of workers. We must fulfill the fundamental promise that a lifetime of hard work will be met with a retirement of dignity and security.”

 Taking a Look at the Nuts and Bolts

“Most Rhode Island workers hope to retire someday,” said Catherine Taylor, State Director of AARP RI in supporting the passage of the Secure Choice legislative proposals that tie nicely into AARP’s mission to “empower people to choose how we live as we age.”  

According to Taylor, Secure Choice provides a “simple and easy way to save to the over 172,000 private sector employees in Rhode Island who currently do not have access to a way to save through their work.” That is about 40 percent of Rhode Island’s private sector workers, she says, noting that this percentage includes workers at all levels of earnings, education, and backgrounds.

“All of them would benefit from the ability to use payroll deduction to save for retirement. People are 15 times more likely to save if it can be done out of their regular paycheck. 20 times more likely if this can be done automatically,” she added, stressing that this program would be easy for employees of Rhode Island’s small businesses to participate in. It’s also free for employers.

At last Tuesday’s press conference, Taylor noted that AARP’s mission is to “empower people to choose how we live as we age.”  

“Saving for retirement is critical because those savings mean financial resilience and empowerment for older Rhode Islanders. Many older Rhode Islanders who did not save for retirement are living solely off Social Security and have few options as to where and how they age. For older Rhode Islanders to thrive it is important to have access to a simple and easy way to save for retirement during our working years,” says Taylor.

Taylor states that passage of Secure Choice will give all workers the chance to begin saving for their retirement, giving them a way to retire with more security. 

By the numbers…

In May 2022 AARP Rhode Island surveyed 502 small Rhode Island businesses and the results showed that 72 percent of these small business owners were supportive of a privately managed, ready-to-go retirement savings option that would help them offer employees a way to save for retirement. The study, released on July 2022, found that 81 percent –  https://www.aarp.org/research/topics/economics/info-2022/rhode-island-retirement-savings-small-business-owners.html – of the respondents agreed that the lawmakers should pass a bill to make it easier for small business owners to access a retirement savings option for their employees and themselves.

“Secure Choice is all about choice and control. It is voluntary for employees: how much you save, if at all, is entirely up to you, as are the investments you choose. Employers need only pass on information from the program and add a payroll deduction option, says AARP’s Taylor, stressing that they can open an alternative plan of their choosing at any time.

Taylor notes that Sixteen states have enacted similar programs. Eight of those programs are open for business and have over 634,000 funded accounts and $662 million in assets under management as of December. Over 30 states recently acted to study program options or consider legislation., she said.

Legislative proposals to create a Secure Choice program were introduced in 2019, 2020, 2021 and 2022.  During this legislative session, now is the time for lawmakers to push the legislative proposal to the goal line for passage. 

Taylor sees a positive impact on the state’s budget if the Secure Choice is passed and signed into law by Rhode Island Governor Dan McKee.  “When more people save for retirement, it decreases reliance on public assistance, having an enormously positive effect on the state’s balance sheet,” she said stressing that it’s sound fiscal policy for state. AARP Rhode Island will be releasing a fiscal impact analysis on Feb. 28, that is being prepared by The Pew Charitable Trusts.  Stay tuned.  

A broad coalition of aging advocacy groups from across the state support Secure Choice, including AARP Rhode Island, the Latino Policy Institute, SEIU, Progreso Latino, Working Families Party, Hispanic Chamber of Commerce Economic Policy Institute, and the Rhode Island Black Business Association.

To watch the Secure Choice Press Conference, held on Feb. 14, 2023, go to

https://ritv.devosvideo.com/show?video=037dd6f1f3d8&apg=7e98c085

To read Aug. 2022 Fact Sheet: Rhode Island detailing the benefits of enacting enabling Rhode Islanders to save for their retirement, go to

Click to access rhode-island.doi.10.26419-2Fppi.00164.041.pdf

To read AARP Director Catherine Taylor’s Op Ed, “We Need Secure Choice”, go to  

https://states.aarp.org/rhode-island/we-need-risavers