Sen. Terry Gauthier, R-Helena, says small business employees who earn less than $40,000 a year are not likely to save for retirement. So, he’s introduced a bill that he hopes will help them.
Senate Bill 346 would create the Montana Optional Retirement for Employees Savings Program.
The program would provide a one-time tax credit of $500 and would be overseen by the state’s Department of Commerce. The bill passed out of the Senate Finance and Claims Committee Wednesday on a 16-2 vote.
The bill now moves to the full Senate for debate.
Gauthier said service workers are under represented and need an opportunity to enroll in a program like the one provided in his bill.
“Many of the employees simply just don’t know how to save for retirement and don’t know where to begin to shop for products,” Gauthier said.
Jacalyn Boyle, lobbyist for AARP, supported the bill and said the responsibility of the state in this program is very limited.
“The money goes directly from employee to third-party vendor,” Boyle said.
Riley Johnson, lobbyist for the National Federation of Independent Business, opposed the bill and said if the amount taken out of employees’ paychecks was too high and the return was not worth it for them, the business and state could be held liable.
“The one thing that small businesses don’t want is to be able to have to spend $10-$25,000 to prove that they were right,” Johnson said.
Freddy Monares is a reporter with the UM Legislative News Service, a partnership of the University of Montana School of Journalism, the Montana Broadcasters Association and the Greater Montana Foundation.