PROVIDENCE – A new government commission will look at whether the state should establish a system that allows employees of small businesses to establish individual retirement accounts through the state government.
The proposed savings system – known as Universal Voluntary Retirement Accounts – would be available to workers at small businesses which do not offer a regular retirement savings program. Only about half of Rhode Island employers offer retirement benefits to their full-time workers, and just 19 percent offer plans to part-timers, state officials say.
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The accounts would be defined contribution plans, meaning workers would divert some of their wages from each paycheck into the account through automatic payroll deductions as is done for a standard 401(k). The state says it would outsource the program’s administration to a private company.
The General Assembly passed a bill to create the commission that will study the proposal at the request of R.I. General Treasurer Frank Caprio, and it became law on July 16 without Gov. Donald L. Carcieri’s signature.
In addition to Caprio, the commission’s other seven members will be two senators, two members of the House of Representatives, a member of AARP’s Rhode Island chapter, a local businessperson and a member of a state employees union.
The commission is expected to release a report containing its findings in January.
A number of other states also are considering establishing a Universal Voluntary Retirement Account system, according to the Economic Opportunity Institute, a Seattle-based research group, and Hillary Clinton proposed a national system during her presidential bid.
