Gov. Carney signed HB 205, the Delaware EARNS Act, into law last week.
The law will potentially benefit 150,000 Delawareans without a retirement plan.
With the enactment of the legislation, the Office of the State Treasurer officially begins building the infrastructure that will drive the landmark retirement program.
Delaware EARNS (Expanding Access for Retirement and Necessary Savings) requires businesses with more than five employees that don’t currently offer a retirement plan that deducts money from their checks that would go into an account. Employees have to opt out of the account and can cancel at any time.
The bill was passed with pockets of opposition from the business community, which cited the paperwork burden and some employees who need money right away.
“We’ve worked long and hard to make this program a reality for Delawareans who lack access to an employer-sponsored retirement program,” said State Treasurer Colleen Davis. “I am grateful to Representative Larry Lambert, Senator Nicole Poore, all of their colleagues in the General Assembly, the AARP of Delaware, and of course the Governor for helping us get here.”
OST will hire an executive director who will guide the operation of the program and work with the Delaware EARNS Program Board, established by the legislation to overseethe initial design and launching of the program. The board will consist of the State Treasurer, Secretary of Finance, Insurance Commissioner, Secretary of Labor, and chairperson of the Plans Management Board, each of whom may appoint a designee, as well as two members of the public chosen by the governor.
“It shouldn’t matter what your background or job is: every Delawarean deserves the opportunity to enter into retirement with economic dignity and security,” said Rep. Lambert, D-Claymont, prime sponsor of the legislation. “For small businesses and the almost 150,000 Delaware workers lacking an employer-sponsored saving program, the Delaware EARNS program will be financially transformative, allowing residents to save for the future while filling a critical need in the marketplace. This new program will put thousands of working Delawareans on a level playing field when it comes to their financial future, and I am excited to see it in action.”
The bulk of the state’s larger employers retirement savings such plans that often come with the employer matching a portion of the employee contribution. However, many smaller organizations shy away from the paperwork, payroll deduction and other steps required in setting up a 401k program.
Even with such programs and the disappearance of fixed pensions at most private employers, many Delawareans no longer have sufficient savings for retirement,
More information about Delaware EARNS can be found at de.gov/earns.
