A divided CT House passes retirement security legislation
The Democratic majority in the House of Representatives outlasted a Republican filibuster early Tuesday to pass legislation that would mandate payroll savings deductions and create a quasi-public authority to offer private-sector workers a retirement savings program.
The House passed the measure 76 to 63 at 2:58 a.m. after a debate that began early Monday evening. The bill now goes to the Senate, where a co-sponsor is the chamber’s top leader, Senate President Pro Tem Martin Looney, D-New Haven.
The bill was opposed by the private securities industry as an intrusion into the market, but supported by AARP and other groups as a boost to 600,000 residents who have no access to a work-place retirement program.
Gov. Dannel P. Malloy said an a brief interview that he supports a key provision of the bill: the mandate on employers to offer payroll deductions for retirement savings. But he did not commit to signing the bill should it reach his desk.
“I’m going to talk to some of the folks in the business community. I think an appropriate step would be to require employers to have a direct withdrawal,” Malloy told The Mirror after voting Tuesday morning in the presidential primary. “I have to take a look at what they finally passed to figure out whether this is the right vehicle.”
The bill would require businesses that do not offer a 401K plan or other payroll savings plan to participate. Employers would not be required to contribute, only to offer a payroll deduction for investment in a Roth IRA overseen by the new authority.
Employees would be automatically enrolled, but they could opt out.
“The goal is not to compete with or replace the private market, but to fulfill a significant unmet need in the market that must be answered for the sake of those families and our entire state economy,” said Comptroller Kevin Lembo, a proponent of the measure.
Lembo was the co-chair of the Connecticut Retirement Security Board, a panel created by the General Assembly to study the issue and help draft the proposal that was a priority of House Majority Leader Joe Aresimowicz, D-Berlin.
Rep. Richard A. Smith, R-New Fairfield, was among the Republicans to oppose the bill as an anti-business measure that competes with private retirement plans.
“This is another attack upon them,” Smith said.
Republicans also questioned whether the program would be financially self-sustaining.
Seven Democrats — Brian Becker of West Hartford, John Hampton of Simsbury, Ed Jutila of East Lyme, Frank Nicastro of Bristol, Danny S. Rovero of Killingly, Jonathan Steinberg of Westport and Peggy Sayers of Windsor Locks — joined all 56 Republicans present in voting against the bill.
A Republican amendment accepted by the Democrats would bar members of the authority’s board, its officers and vendors from making campaign contributions to candidates for statewide constitutional office or state party committees. As written, the amendment would have barred Lembo and Treasurer Denise Nappier, who would be voting members of the authority, from contributing to their own campaigns.
A subsequent Democratic amendment exempted them from the ban.
The board would have nine voting members appointed by the governor and legislative leaders of both parties. The governor would select a chairperson, subject to confirmation by the General Assembly.
Lembo and Sarah Gill, a retirement security expert at AARP, were interviewed by the Mirror last week about the program.
The video is below.
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