RALEIGH — A new bill making its way through the North Carolina General Assembly would create and appropriate funds to a small business savings and retirement program.
House Bill 899, or North Carolina Work and Save bill, would establish a 12-member North Carolina Small Business Retirement Savings Board housed in the Department of Commerce. The board would have 20 duties listed in the bill, according to the bills text.
One of the duties would be to design, develop, implement, maintain, govern and promote rules related to a payroll deduction retirement savings program for employers that do not provide a retirement program, according to text of the bill.
“It’s a very interesting idea, I think, to help people save more,” said Rep. Ray Pickett (R – Blowing Rock). “If we can get them to save a little bit more with our help, it will be better in the long run for when they retire.”
The bill’s first clause states that the General Assembly found that many North Carolina citizens have no or inadequate savings and that an estimated 1.7 million North Carolina working families — including employees, independent contractors and the self-employed — have no access to an employer-sponsored retirement plan or program or other easy ways to save at work.
Pickett said this program would be similar to the North Carolina 529 college savings plan — a tax-advantaged way to save and invest for education and can be used for two- and four-year colleges, K-12 tuition and certain student loan payments, according to the College Foundation of North Carolina.
“It can work like that, just going through businesses,” Pickett said. “I’d like to know a little bit more in detail how much work are we putting on businesses to do this and how we’ll implement it, but that’ll come out in the committee meetings.”
Pickett, who is a sponsor of the bill, said it’s still in the very early phases and the bill could change as it makes its way through committees. Pickett said it will go to the finance committee first and then to appropriations, of which he is a member.
Pickett also said the money allocated for this bill is not much considering the millions of dollars for the full state budget The bill would appropriate $400,000 for 2021-22 and $600,000 for 2022-23 from the General Fund to the Department of Commerce to be allocated to the board.
David Jackson, CEO and president of the Boone Area Chamber of Commerce, said he also has questions on how it would be administered, but said anytime a business can offer a benefit that helps their employees positively is typically advantageous.
“Many times ultra-small businesses don’t have access to these types of retirement plans, or even health insurance or other benefits due to low employee counts,” Jackson said. “As we watch this bill develop, it will be important to watch exactly what the state’s role in this program will be, and how much administration will be left to the businesses to manage.”
If the bill passes in the State House and Senate and is signed by Gov. Roy Cooper, it would go into effect July 1. The full bill can be found at \ www.ncleg.gov/Sessions/2021/Bills/House/PDF/H899v1.pdf.
Sen. Deanna Ballard’s office (R – Watauga) did not provide comment on the bill.