RALEIGH — A new bill introduced in the North Carolina House aims to help millions of workers save for retirement through a state-facilitated program.
House Bill 79, known as “North Carolina Work and Save,” would establish a Small Business Retirement Savings Program to address the state’s significant retirement savings gap.
The program would create a public-private partnership enabling small business employees to save through Individual Retirement Accounts (IRAs) through payroll deductions. The program would be overseen by a 12-member North Carolina Small Business Retirement Savings Program Board, which would operate independently within the Department of Commerce.
During a Feb. 12 press conference, Rep. Jarrod Lowery (R-Robeson) highlighted the pressing need for this initiative.
“I always say that North Carolina is the best place to live, work, worship and raise a family. But it’s also, and it should also be, the best place to retire,” said Lowery. “Currently, right now in North Carolina, we have nearly 2 million people who work for mostly small businesses that have no way to plan for retirement or save for retirement.”
Lowery said the average Social Security benefits for a person over 65 in North Carolina is currently about $21,000 a year.
“But currently, when you put the food costs, utilities and health care alone, you’re over $22,000,” said Lowery. “So we have North Carolinians that are not prepared if they’re only saving for retirement through Social Security.”
Lowery said the NC Work and Save Act would create a “public-private partnership” allowing the state Treasurer’s Office to set up a program where the state’s small businesses and their employees can sign up to save for retirement. He said there would be no cost to the taxpayer or small businesses, and it would be a recruitment tool for the business and a benefit for the employees.
“So right now, North Carolina spends millions — actually hundreds of millions of dollars a year — in public assistance programs,” said Lowery. “If we can have those 2 million North Carolinians prepared for retirement in 10 to 20 to 30 years, we could save the taxpayers, we could save the state, hundreds of millions of dollars. And actually, Pew estimates that we could save half a billion dollars a year in public assistance programs.”
Officials representing AARP NC who were on hand during the press conference gave their support to the bill.
Key features of the program include a default 5% contribution rate with a Roth IRA as the standard option, professional fund management and annual account status reports. The program prohibits employer contributions to employee accounts and mandates low fees and expenses.
In response to a media question about state funding, Lowery said there would need to be initial funding of around $1 million and gave the example of ”$400,000 this year, $600,000 next year to get started.”
The bill sets several implementation deadlines: board appointments by Oct. 1; first board meeting by Oct. 15; and program operations beginning by July 1, 2027. The legislation includes provisions for regular audits, education and outreach programs, and compliance with federal ERISA regulations.
