AARP Arkansas Calls for Public-Private Retirement Savings Option

A recently completed survey by the AARP shows an overwhelming number of Arkansas small businesses believe more should be done to support retirement savings options for their employees.

Arkansas’ division of the AARP presented its findings Monday on the steps of the Arkansas State Capitol. In a survey of small business owners, 79% said they would support legislation to establish a privately managed statewide retirement savings option, while 88% said they would support legislation to create a public-private retirement savings option.

A “public-private” savings option is a savings partnership overseen by the state and run by a financial services provider from the private sector. Employees can voluntarily sign up for an account and take it from job to job while deciding how much retirement savings they would have deducted from their paycheck.

AARP Arkansas’ proposal, dubbed “Arkansas Saves,” would require legislative support in order to pass.

“Small businesses recognize there is a retirement savings crisis in Arkansas,” AARP State Director Ashley McBride said. “They want lawmakers to take action. More than 514,000 Arkansans cannot access a retirement savings plan at work. If we make it easy for more workers to save through payroll deduction, small businesses will benefit, taxpayers will save money, and workers will build savings that will provide more options in their retirement.”

AARP Arkansas’ research suggests that 76% of the state’s small business owners believe offering a retirement savings plan would help them stay competitive. According to Pew Charitable Trusts, Arkansas could save up to $2.7 billion over 20 years by implementing a public-private savings option such as Arkansas Saves.

“AARP Arkansas has a mission to help people choose how to live as they age,” said Chris McCoy, associate state director of advocacy and outreach for AARP Arkansas. “To truly be able to choose, you have to start saving for retirement early, preferably from job one. The plan we’re proposing is a big step forward in helping small businesses offer retirement savings options for their employees without burdening the small businesses that are the backbone of Arkansas’ economy.”

Legislation similar to Arkansas Saves was recently passed in Missouri. All told, over 11 states have passed public-private savings programs for retirement, with the assets under management exceeding $839 million. 

READ ALSO: Mayor Scott Discusses Crime, Infrastructure, Economy After State of City Address