AUGUSTA — State lawmakers will revisit a bill to create a state-run retirement savings program for Maine workers who don’t have employer-based plans.

The measure, sponsored by Sen. Eloise Vitelli, D-Arrowsic, is backed by the AARP and would have Maine join six other states with programs.

Sen. Eloise Vitelli, D-Arrowsic  Joe Phelan/Kennebec Journal

The plan would largely be self-sufficient after initial startup costs, according to Mark Iwry, a senior fellow at the Brookings Institution, a nonprofit public policy organization in Washington, D.C., and a former senior adviser to the secretary of the U.S. treasury.

Iwry said similar programs in other states are self-sufficient and require limited government bureaucracy.

“There would be a few people setting it up but the really heavy lifting here is done by the private sector,” Iwry said.

California, Illinois, Oregon, Connecticut, Maryland and Massachusetts have state-run employee savings plans for private sector workers. The first five automatically enroll most workers if their employers do not offer a retirement plan. The Massachusetts plan is more narrowly tailored to nonprofit workers, according to the National Association of Insurance and Financial Advisors.

Iwry joined Vitelli, AARP Maine State Director Lori Parham and AARP member and business owner Barbara Babkirk to describe the bill at a news conference Tuesday at the State House.

Vitelli, Senate assistant majority leader, said such a plan could help some 235,000 Maine workers who depend largely on Social Security benefits when they retire.

The bill was carried over from the 2019 session and will be the subject of a work session and public hearing in early February, but no date has been scheduled.

Vitelli said the bill not only would help retirees, many of whom struggle to live on Social Security, but also would reduce dependence on taxpayer-funded benefit programs that assist the elderly and poor.

Babkirk, who helps Mainers age 50 and older find jobs, said the bill would help attract retirees back to the workforce, which could reduce the state’s skilled labor shortage.

Opponents, including the American Council of Life Insurers, have said it would create an uneven playing field and put the state in direct competition with the private sector, including some 208 companies that provide life insurance, annuities and financial planning for Maine residents.

“The market for retirement savings products in Maine is already vibrant and competitive,” Elizabeth Frazier, an attorney and lobbyist for ACLI, told lawmakers last February.


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