Conn. legislature mulls worker retirement access

Labor unions and their Democratic allies have voiced alarm at the erosion of pensions as companies, facing intense competition and pressure on profit and revenue, eliminate the costly benefit. In its 2012 report, the Pension Benefit Guaranty Corp., a federal agency, said fewer than half of private sector workers, or 45 percent, have employer-provided retirement plans. Most are contribution plans such as a 401(k) in which workers invest money in stocks and bonds rather than a company pension, it said.

Beverley Brakeman of the United Automobile Workers told lawmakers in testimony at a public hearing that the legislation is a “new and developing idea.”

It would establish retirement accounts outside the workplace, allowing workers to control their own retirement “in a way that is not tied to an employer’s need to grow revenue and profits,” she said.

Bob Kehmna, president of the Insurance Association of Connecticut, said the legislation is unnecessary. “Connecticut already benefits from highly functional and competitive services,” he said.

Republican Rep. Gail Lavielle of Wilton said she has “quite a few problems” with the measure, including what she said is a lack of clarity and a “deep skepticism” about how well funds would be managed. Before the Appropriations Committee approved the legislation 28-20 on Tuesday, she told fellow lawmakers that numerous individual retirement accounts are available to workers regardless of what state government may offer.

“It is the choice of all of our citizens to save or not to save for retirement and I’m very uncomfortable with the idea of the government pushing people in one way or another and any type of quasi-automatic enrollment unless someone opts out seems to move in that direction,” she told said.

See also:

• NASRA: Public pension funds outperform assumed rates of return
• Milliman sees an increase in funding of pensions
• California bill to create state pension program