Digesting the implications of federal policy changes is quickly becoming a forte for our policy analysts. This week, our health analyst, Natalie O'Donnell Wood, provides the Colorado perspective on Congressional Republicans' proposal to unwind the Affordable Care Act. She highlights a number of Colorado health care advocates’ findings. As you will see, the reversal of so many gains made in the past few years is alarming. Ultimately, the “American Health Care Act” represents more self-imposed scarcity that forces false choices for communities working to expand the cycle of opportunity for as many Americans as possible.
Against this backdrop, we are fighting hard to expand opportunity in Colorado. This week or next, Colorado Representatives Brittany Pettersen and Janet Buckner are introducing a measure that would dramatically help people with no access to retirement programs at work. The Colorado Secure Savings Plan makes it much easier for workers to save through automatic deductions from their paychecks that would flow to low-fee investment accounts.
We’ve long championed this common-sense idea and a glance at the last month of national headlines reinforces this priority. We’ve seen intense focus on retirement security. Media outlets like the New York Times have devoted entire sections to the topic. The U.S. Census Bureau issued a working paper showing that the average American only has $5,000 in total savings. Congress is debating an important ruling from the Department of Labor on state and local plans.
For many, this national discussion begs the question: What kind of problem are we facing in Colorado and what should we do about it? That’s exactly what the Bell Policy Center has been focusing on. We’ve researched the complex dynamics of retirement and are advocating for a solution that a growing number of states and local governments are using to combat the costs of inaction. We need the Colorado Secure Savings plan to tackle some daunting challenges in Colorado.
- Access to workplace plans – the most effective path to retirement savings – is too limited. Over 750,000 people in their prime working years have no retirement savings plan at work
- Younger workers don’t have easy access to retirement programs. Nearly half of Colorado workers ages 25 to 34 don’t have retirement savings plans at work.
- Small businesses are struggling to provide retirement options. Eight in 10 Coloradans working in small businesses have no workplace retirement plan.
The problem is real and all signs show that both employees and employers know it. In a 2016 Gallup Economy and Personal Finance Survey, nearly two-thirds of respondents said they were “very worried” or “moderately worried” about not having enough money for retirement. Among employers, a Pew Trusts poll found that 86 percent of small to medium sized businesses support the overall concept of a workplace IRA account where employees are automatically enrolled.
Despite this demand, resistance from the financial services sector persists. While plans like these mostly serve people who are currently no one’s customers, its clear that the industry is concerned about the appearance of low-fee alternatives in the retirement market. This means we and our coalition will have to work doubly hard to demonstrate that there’s a difference between the interests of “business” and “business as usual” approach by the financial services industry.
The Bell Policy Center’s research shows that Colorado is no different from the rest of the nation when it comes to anemic retirement savings. What will set us apart is our willingness to do something about it. Stay tuned!