Louisiana Senate Bill SB283

Louisiana 2014 Regular Session

• Introduced: 3/10/14
• Refer: 3/10/14

Caption

Creates a portable retirement savings plan for private sector employees. (7/1/14) (OR DECREASE FC GF RV)

Impact

The legislation is set to streamline retirement savings for private employees by implementing a standardized savings plan, thus enhancing the financial security of workers in their retirement years. Importantly, the bill excludes churches and employers with fewer than five employees or those that have been operational for less than nine months from mandatory participation. The establishment of a five-member board of trustees to manage the Plan aims to oversee investments judiciously and ensure effective benefit provision to participants.

Summary

Senate Bill 283, known as the Louisiana Retirement Savings Plan, establishes a statewide retirement savings program aimed at private sector employees in Louisiana. This bill mandates that private employers, who do not already offer a retirement savings plan, participate in this new Plan. The intention is to provide accessible retirement benefits while ensuring maximum portability of the accumulated assets for participating employees. Employers are required to automatically enroll employees at a contribution rate of 3% of pay, which will not be taxable by the state of Louisiana.

Sentiment

The sentiment around SB 283 is generally positive among proponents who believe it will assist employees in planning for retirement and reduce the reliance on state welfare in old age. However, concerns have been raised regarding the automatic enrollment requirement and whether it may inadvertently create challenges for employees who prefer to manage their own retirement savings independently. Overall, stakeholders recognize the bill's potential in fostering a culture of saving for retirement among private sector workers.

Contention

Notable points of contention revolve around the potential administrative burdens placed on small employers, particularly those who may struggle with the requirements of the Plan despite being exempt from offering other retirement options. Additionally, some critics are wary of the lack of fiduciary responsibility placed on employers regarding the selection and management of the Plan, which may raise concerns about the quality of the investment decisions made on behalf of employees' savings.