WILTON, Conn. -- Wilton state Rep. Gail Lavielle (R-143) is joining with House and Senate Republicans in opposing a bill that would create a state-run retirement fund.
The legislators joined a group of business advocates and financial advisers in opposing SB 249, which was awaiting consideration in the state Senate. The bill would "require those employers with participating employees to withhold 2 [percent] to 5 percent of their income for deposit into the state-run retirement fund," according to a press release. Employees choosing not to participate would have to opt out in writing every two years. The state-run retirement plan would be managed by the State Comptroller’s Office and a special oversight board, according to the release.
Administrative costs associated with the plan would increase state spending by $8 million, according to the release.
“My colleagues and I join many of our constituents in the business and financial community in opposing this legislation for many reasons,” said Lavielle, who also represents parts of Norwalk and Westport.
“It puts the state in direct conflict with businesses in the financial sector that provide retirement plans. It creates onerous financial and administrative obligations for businesses that must facilitate employee access to the state-run plan. It puts working people, private citizens, in the position of having to reject actively a requirement to spend their money on something they may not want or be able to afford. There are also numerous legal obstacles. Finally, it raises real questions about the role of government.
“Another set of questions I would see arising if the state were to run such a plan would concern its investments in Connecticut state and municipal securities,” said Rep. Lavielle. “Major investment in Connecticut government securities might affect their pricing on the open market. It might also raise questions about potential conflicts of interest.
"Therefore, if this legislation were to pass despite the many obstacles, I believe that the plan’s allocation of funds to Connecticut securities should be subject to clearly defined limits. If the bill does move forward before the end of this session on May 7, I will be proposing an amendment on this subject.”