Kentucky Treasurer Todd Hollenbach is backing legislation in the Kentucky General Assembly that would create a retirement savings account for Kentuckians who can’t get one through their employers.
The bill is sponsored by Rep. Martha Jane King, a Democrat from Lewisberg.
“We want to reduce the amount of people that have to depend on government to exist, and making our people financially responsible is something this legislation will do,” King said on Tuesday during a news conference.
The Kentucky Retirement Account program is geared toward small businesses with at least five employers but don’t offer retirement plans.
During the news conference, Hollenbach said the program would cost employers nothing. Employees would be automatically enrolled but could opt out.
Hollenbach stressed that the program would not be managed by the state. The retirement account would be managed by a private investment firm that would be selected by a seven-person board. The board would consist of the treasurer, secretary of finance, labor commissioner, three people from the finance sector and one person from the general public.
“This is designed so that it will have no fiscal impact on the state,” Hollenbach said. “It creates no fiduciary obligation on the employers, it’s simply a method by which the state can act as a catalyst to set up a private sector solution to allow people to begin to more easily and affordably plan for retirement.”
Scott Wegenast of AARP Kentucky said that the program will help younger people plan for retirement.
“It gives them the opportunity to be secure in their future,” Wegenast said. “Social Security can’t do it all, and everybody knows that.”