Employer-sponsored retirement savings plans can help workers secure a sound financial future.

But in Pennsylvania, where small businesses often cannot afford to offer retirement benefits, as many as 2 million private sector workers lack access to a workplace retirement plan. Business owners need a basic, no-cost retirement savings option until they can provide their own plan.

Helping more Pennsylvania residents save will also reduce the burden on taxpayers. A 2018 study of the fiscal and economic costs of insufficient retirement savings found that every county in Pennsylvania is experiencing a savings shortfall, resulting in increased public assistance costs, reduced tax revenue, decreased household spending, and lower employment. 

The price tag of these savings deficiencies? An estimated $14.3 billion over 15 years—a burden that falls on Pennsylvania taxpayers.

Last year, Pennsylvania legislators introduced the Keystone Saves Act (H.B. 2156) to address this growing fiscal shock; lawmakers are working to introduce the bill in the new legislative session. The bipartisan retirement savings bill would expand the ability of people to save when they don’t have an employer-provided retirement plan. The bill would:

1. Give businesses a no-cost retirement benefit for their workers.
2. Help hard-working Pennsylvanians secure their financial future.
3. Reduce the state’s $14.3 billion fiscal burden from low retirement savings.

The Keystone Saves program is intended for businesses without a retirement plan and would rely on voluntary regular payroll contributions to fund individual retirement accounts (IRAs). Keystone Saves would be a public-private partnership in which IRAs are professionally managed by a third-party financial firm overseen by the state. Administration and investment fees would be kept low through the economies of scale produced by a statewide program.