OFFICE OF FISCAL ANALYSIS
Legislative Office Building, Room 5200
Hartford, CT 06106 (860) 240-0200
http: //www. cga. ct. gov/ofa
AN ACT CONCERNING SMALL BUSINESS RETIREMENT PLANS.
OFA Fiscal Note
FY 09 $
GF - Cost
Note: GF=General Fund
The bill requires the comptroller to establish a 401(k) plan for self-employed individuals, employers with 100 or fewer employees, and certain nonprofits. The bill specifies the program is to be administered by a third party and the plan design must include a fee to participants in order to recover costs associated with the program.
Funding in the amount of $500,000 is appropriated to the Comptroller's Office in sHB 5021, the Appropriations Act, as favorably reported by the Appropriations Committee, to establish the program. The funding will be used as follows: $125,000 for the preparation of an Employee Retirement Income Security Act (ERISA) compliant document plan, $125,000 for production of educational and marketing materials, $100,000 for production and distribution of documents and retirement planning tools, $150,000 for advertising, mailing, and outreach to small business.
It is estimated that there are approximately 500,000 employees of businesses with 100 or fewer employees that do not currently participate in a retirement plan. The amount of time it takes the state to recover funds appropriated for the program will be a function of the fee charged and the level of small business participation.