Gov. Chris Christie on Monday vetoed a bill that would have created a state-sponsored retirement plan for private-sector workers, offering in its place a retirement marketplace for small businesses.
TRENTON -- Gov. Chris Christie on Monday vetoed a bill that would have created a state-sponsored retirement plan for private-sector workers, instead suggesting a retirement marketplace for small businesses.
In his conditional veto, Christie said the Secure Choice Savings Program would create a duplicative government bureaucracy while burdening small businesses.
Sponsored by Senate President Stephen Sweeney (D-Gloucester) and Assembly Speaker Vincent Prieto (D-Hudson), the bill (A4275) would have filled the retirement savings gap for New Jersey workers who don't have access to employer-based plans. It required businesses with 25 or more employees to set up a payroll deduction IRA if the they didn't already provide their own retirement plan.
Contributions to the plan from workers would have been voluntary, and employers wouldn't have been obligated to kick in. Smaller companies with fewer than 25 could have opted in, as well.
Most N.J. workers anxious about being able to afford retirement, poll shows
That plan would have been administered by a seven-member board of officials and placed a limit on investment and administrative fees. Although the fund would have been state-administered, the money would not be guaranteed by the state, and there would be no contribution from the state.
About 1.7 million people in New Jersey's workforce don't have access to an employer-sponsored plan, according to the AARP. And a U.S. Federal Reserve report has indicated that 31 percent of working Americans polled have no retirement savings.
Nearly half of New Jersey's workforce is employed by small businesses.
"I share the sponsors' concerns for the financial future of the residents of New Jersey, but I believe that the approach taken by the Legislature -- mandating participation under a threat of fines for not participating -- is unnecessarily burdensome on small businesses in New Jersey," Christie said in his veto statement. "The bill also requires the state to bear the initial cost of creating the program, subject only to reimbursement when funds become available.
"Finally, the bill creates yet another government bureaucracy to oversee and implement the program, while there are plenty of private-sector entities with particular expertise that can perform this function instead."
Christie instead proposed a marketplace for small businesses, based on a similar setup in Washington state that connects small businesses and their employees to existing investment vehicles.
"By following this model, the New Jersey Small Business Retirement Marketplace will provide a market-based approach so that small businesses can offer a simple and inexpensive way to offer private savings to their employees, which will result in workers saving more for retirement throughout their lives," according to the veto.
Doug Johnston, state director of the AARP, which backed the Secure Choice bill, said that while he was disappointed Christie conditionally vetoed the bill, "the governor signaled that he is willing to talk about solutions to the retirement security crisis in (New Jersey), and so we look forward to continuing conversations on the topic."
Samantha Marcus may be reached at smarcus@njadvancemedia.com. Follow her on Twitter @samanthamarcus. Find NJ.com Politics on Facebook.
