HARRISBURG, PA — Keystone Saves, say its proponents, could help you save for retirement. And that would potentially save the state—and taxpayers—billions in increased social service costs over the next 15 years.

This matters because more than two million Pennsylvania residents don’t have access to a retirement savings plan at work, said Stacy Garrity, state treasurer.

House Bill 2156 would create Keystone Saves, a new state-level savings program. The program would enable employers—without charge—to offer a state-facilitated retirement plan to their employees by setting up a simple payroll deduction.

National data show that people who have access to a retirement plan at work are 15 times more likely to save than people who lack that access, a news release noted.

The contributions would be invested in mutual funds. Workers could opt out of the program or adjust contributions at any time. Participants can withdraw contributions tax- and penalty-free for any reason, such as a financial hardship, and savings would be automatically portable across participating employers.

A 2018 survey of small-business owners in Pennsylvania found that 57 percent expressed concern about their employees not having enough money to cover their health care or living expenses when they retire. Respondents noted that barriers to offering a program included cost, time and a lack of resources to interpret the complicated market and operate a retirement savings program.

Three-quarters of respondents supported a ready-to-go option that would help small businesses in the state offer their employees a way to save for retirement.

“As a very small business and a farm, our cost margins and limited time make it almost impossible to offer any sort of conventional retirement plans,” said John Good, owner of the Good Farm in Germansville. “The great part about this program is that it gives small businesses like ours a simple, no-cost solution to provide employees with retirement savings.”

The lack of access to a retirement plan has long-term impacts on both their personal lives and every taxpayer in the state, said Garrity. “If we don’t make it easier for Pennsylvanians to save for retirement, unprepared retirees will cost taxpayers more than $14 billion in increased state social services over 15 years—and we’ll lose out on nearly $1.5 billion in tax collections over that same time. Keystone Saves is a business-friendly approach to a problem that we must solve.”

“Keystone Saves will provide businesses and their employees an easily managed tool—at no cost to the business,” said Rep. Michael Driscoll (D-173), “to simplify the sometimes complicated and costly process of providing employees with a retirement savings option.”

“Without proactive long-term solutions like Keystone Saves, Pennsylvania taxpayers will ultimately be on the hook for rising costs that retirees can’t cover,” said Rep. Tracy Pennycuick (R-147). “We need to equip individuals with the tools for financial success in order to avoid further reliance on government-funded programs. This is a program that is both business and employee-friendly by setting everyone up for success.”

House Bill 2156 is sponsored by Reps. Pennycuick and Driscoll, and was introduced with the bipartisan support of 36 co-sponsors. To learn more and stay updated on this legislation and program, visit https://www.pewtrusts.org/keystonesaves.