House Democrats are proposing a state directed investment option for Iowans who don’t have access to a retirement plan through their employer.
Iowa businesses with five or more employees that don’t offer pensions or 401ks would have to notify the state and IRAs would be set up for those employees, although workers could opt out and choose not to participate.
Representative Austin Baeth of Des Moines said 19 other states have launched similar program. “A very large percentage of our citizens are not financially prepared for retirement,” Baeth said during a news conference this morning.
A recent survey found 19% of retired Iowans are relying solely on Social Security benefits. “A mission of Iowa House Democrats is to see that every Iowan has the opportunity to realize their life’s full potential at every stage of their life,” Baeth said, “and it’s not right that so many of Iowa’s seniors who should be enjoying the fruits of their labor are instead just struggling to get by.”
Baeth said he’s pushing for state action because research shows only half of Iowa workers have a retirement savings plan. “One third of Iowa’s private sector workers lack access to an employer-sponsored retirement savings plan,” Baeth said. “That’s an estimated 424,000 Iowans.”
Republicans control the agenda in the Iowa House, but Democrats could offer this proposal as an amendment to bills Republicans bring up for debate. Baeth and other House Democrats say they’re looking for those opportunities with this proposal as well as others discussed during a news conference at the statehouse.