State-run IRA for private workers in Nevada endorsed
August 29, 2018
More than 50 percent of employers in Nevada don't have a pension plan for their workers so a legislative committee has endorsed a proposal to create a state operation to help these private employees save for their retirement.
The Nevada Task Force on Financial Security voted Wednesday to back a plan where workers could voluntarily contribute monthly to a state-operated IRA. It found most Americans aren't saving enough to pay for their retirement years.
Called the Nevada Employees Saving Trust, it's also touted to help small business which can't afford to offer these pension benefits.
Workers now rely on Social Security or retirement savings which fall short of covering big expenses such as medical bills, said the committee which split on the idea. Republican Sen. Pete Goicoechea of Eureka and Assemblyman Al Kramer of Carson City dissented, saying the private sector could handle this without a state-run system.
AARP in Nevada has estimated 557,000 persons work for a business that doesn't offer a pension plan. The task force reported this could save the state $24 million over 15 years if the worker would be able to have an additional savings plan. This would come in less demand for Medicaid, food stamps and housing subsidies.
Business would automatically deduct the amount from the paycheck of a worker and send it to a state committee which would select a fiscal agent to invest the money.
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Kramer objected saying it would require a 5 percent fee for the worker which is higher than charged by a private firm.
The task force adopted some 20 recommendations, some calling for millions of dollars of state money. It's asking the 2019 Legislature to continue a $1 million loan program to small business. Sen. Julia Ratti, D-Sparks, said one question she's frequently asked is why the big companies get tax breaks while there's little for the small business person.
The group supports a law for the state Department of Employment, Training and Rehabilitation to provide money, if it's available, to a low-income apprentice to cover education and living expenses. And the task force said these apprentices should be aware of services available such as child care.
If the federal government doesn't renew its grant for expanding and improving programs for preschool children, the state should continue the services. The federal government now provides $26 million but this is to expire in December. The state has asked this be extended until June 30, 2019.
The committee intends to send a letter to the governor asking for more money to expand services for veterans who are in prison.
The task force will also support legislation for a study to help Nevadans, including undocumented immigrants, gain access to health insurance. And it wants managed care organizations to offer coverage for medically necessary emergency services to a prudent layperson.