A new panel in Maryland will explore ways to help residents save for retirement, rather than depend solely on Social Security, top legislative leaders announced Tuesday.
Senate President Thomas V. Mike Miller Jr. (D-Calvert) and House Speaker Michael E. Busch (D-Anne Arundel) said the 19-member commission, which consists of legislators, business owners and experts in pension plans and retirement programs, will provide recommendations to the General Assembly for legislative consideration in January.
“Secured retirement is not available to many people. To many people, it’s just a dream, it’s an ideal, it’s a hope,” said Miller, who, along with Busch, formed the Commission on Maryland Retirement Security and Savings. “This is our attempt to make it a reality.”
The legislative leaders were joined by U.S. Labor Secretary Thomas Perez for Tuesday’s announcement. Perez has been working with states across the country, including Oregon, Illinois and California, that have taken up similar efforts to design payroll-deduction retirement-savings plans for private-sector employees.
“This is the wave of the future,” Perez said. “There’s a retirement crisis looming across America. People aren’t saving enough, and poll after poll shows that people are very scared about this . . . . More Americans are more afraid of running out of retirement savings than they are afraid of their own death.”
Perez said retirees may have Social Security but “that pillar alone is not enough.”
“We know that when people outlive their retirement savings they are forced to turn to federal, state and local government to meet their most basic needs, and that reality is becoming all too familiar for retirees around the country and right here in Maryland,” Busch said.
With 1 million residents in Maryland over the age of 60 and a projection that seniors will make up a quarter of the state’s population by 2030, lawmakers said Tuesday that this is the time to address the “looming crisis.”
There have been repeated legislative attempts to design a payroll-deduction retirement-savings account. In 2014, the Task Force to Ensure Retirement Security for All Marylanders issued a report that found that most residents with retirement savings did not have enough money to meet their needs in retirement.
Busch said the program will likely encourage employees to invest money in a larger pool of assets, similar to one managed by a third-party administrator. The commission will work out the details of the program and offer them to the General Assembly.
It remains unclear whether a legislative package would get through the legislature. And even if it does, it is unclear whether the bills would have enough votes to override a potential veto by Gov. Larry Hogan (R). The governor has said he does not support additional administrative burdens on business owners and has created a panel to look at regulatory reforms to make Maryland more business-friendly.
“Any measure that adds to our already bloated level of state government bureaucracy or increases the burdens on small businesses and taxpayers will be viewed with a very high level of skepticism,” said Doug Mayer, a spokesman for Hogan. “For years, lawmakers have failed to properly manage the state employee pension system, and it makes zero sense to create another state-run system.”
Commission member James R. Racheff, the chief executive of Data Management Services in Frederick, said small-business owners are concerned about regulations, but they also care about the well-being of their workers.
Racheff said the savings that employees could generate outweighs what amounts to “almost no impact” on employers.