State Treasurer Joe Torsella Wednesday convened the last of four public hearings to explore the state of retirement security in Pennsylvania. The hearing focused on potential solutions to the looming retirement crisis.
As part of the hearing, Treasury’s Task Force on Private Sector Retirement Security heard testimony from the state treasurers of Vermont, which introduced the first state-facilitated multiple-employer retirement plan in the nation and Oregon, which was the first state to launch an IRA program with automatic enrollment and payroll deduction, also known as an "auto-IRA.”
“The findings of the independent study that Treasury released last month showed a bleak view for Pennsylvania’s financial future if we don’t come up with a commonsense response to the retirement crisis,” said Torsella. “Without a solution, more than two million working Pennsylvanians will remain without access to the kind of workplace retirement plan that leads to a secure retirement and supports the future economic health of Pennsylvania. The good news is that other states are pioneering innovative solutions and we can do the same here in PA.”
This hearing was the final of four hearings that addressed the full scope of the retirement security crisis in Pennsylvania through testimony from experts from both the public and private sectors.
The hearings outlined the problem across America, and detailed the savings options available to private employers in Pennsylvania as well as the challenges they face in making those options available.
In addition to testimony from the state treasurers of Oregon and Vermont, the task force today heard from the head of the state of Washington’s retirement Marketplace; a lawyer who specializes in the legal landscape for auto-IRA plans; State Street Global Advisors, who discussed its interest in expanding retirement access; and advocates for the USA Retirement plan.
Last month, Treasury released its independent study evaluating the financial impact of insufficient retirement savings on the Commonwealth.
The study determined that the commonwealth spent an estimated $702 million in additional public assistance costs and lost an estimated $70 million in state tax revenue in 2015 due to insufficient retirement savings by Pennsylvania residents.
These amounts are projected to grow to $1.1 billion in added annual public assistance costs and $106 million in annual lost revenue in 2030, for cumulative totals of $14.3 billion in increased assistance costs and $1.4 billion in lost revenue from 2015 to 2030.
The Task Force on Private Sector Retirement Security consists of Sen. Scott Hutchinson (R-Venango), Majority Senate Finance Committee Chair; Sen. John Blake (D-Luzerne), Minority Senate Democratic Finance Committee Chair; Rep. Bernie O’Neill (R-Bucks), Majority House Finance Committee Chair; Rep. Jake Wheatley (D-Allegheny), Minority House Democratic Finance Committee Chair; Sarah Gill, AARP; Kevin Shivers, National Federation of Independent Business of Pennsylvania; Frank Snyder, Pennsylvania AFL-CIO; and Bob Jazwinski, Pennsylvania Institute of Certified Public Accountants.
Treasury has made the results of its independent study on the financial impact of the looming retirement crisis in Pennsylvania available to the public.
Click Here to view a copy of the report prepared by Econsult Solutions, titled “The Impact of Insufficient Retirement Savings on the Commonwealth of Pennsylvania.”
