(CBS) –If you work for a small business, would you want the state of Illinois involved with your retirement account?
New legislation now in the General Assembly would make that happen for some companies.
Critics say the state’s track record is too poor to take a chance on plan.
CBS 2’s Jim Williams has the details in this Original Report.
We’re told they are the backbone of the economy: small businesses.
State Senator Daniel Biss of Evanston wants their employees to have retirement accounts to prevent what he calls a looming crisis.
“There are two and a half million who have no access to any employee-sponsored retirement plan,” said Biss.
Biss is the sponsor of a bill that’s already passed the state senate that would require Illinois small businesses with at least 25 employees to create 401k plans or have employees contribute three percent of their gross income to an account, selected by the state of Illinois.
“If we don’t make it much easier for them to save through a payroll deduction at work we are going to have a giant, giant amount of poverty in old age,” said Biss.
Financial services professional Marty Przybylski is a critic, doubting the state could properly monitor private sector retirement accounts given its scandals and problems with public employee pension funds and college savings plans.
“At what point in time is the continuous incursion in the private sector from government going to stop?” said Przyblski.
“ Illinois Ttreasury would never have its hands on the money even as a past through. It’s the private property of the worker, held by the private investment manager,” said Bliss.
Senator Biss says employees would be allowed to opt out of the retirement program or they could choose to have more than three percent of the income deducted.
Critic Marty Przybylski predicts it would be a bureaucratic nightmare for already-burdened small businesses. The legislation is now in the Illinois House.