State to design retirement plan for private-sector workers

Connecticut took a major step forward toward offering a state-administered retirement plan for private-sector workers, similar to the 401(k) plans offered by many businesses.

This provision creates the Connecticut Retirement Security Board, a panel charged with investigating the finances and legal challenges of setting up a retirement program that would charge small administrative fees – no more than 1 percent of participants’ investments.

Public-sector unions and Connecticut AARP estimate that more than 600,000 low- and moderate-income residents have small retirement savings plans or none at all.

The provision requires the board to develop a plan to create a retirement program and to submit it to the legislature for final consideration by April 2016.

The concept was opposed by Republican legislators and financial management businesses, who argued it would steal business from these companies and likely cost more to administer than 1 percent of participants’ investments.