Nevada State Senator Dallas Harris is hoping the third time is the charm and has introduced a bill to create a state-supported retirement plan after two previous attempts by the legislature died on the vine.
The bill, SB305, would create the Nevada Employee Savings Trust, which would be directed by a board of trustees with the power to establish a retirement savings program and automatically enroll private employees who do not have a retirement savings plan available via their workplace. To be enrolled, an employee would need to be at least 18 years old, have worked at the same place for 120 days and have wages that are allocable to the state, although employees would be allowed to opt out.
“It is my opinion that if we don’t get people to start saving, our social programs are going to be in trouble in 30 years and 40 years,” Harris, one of four primary sponsors, said during an April 5 hearing on the bill, according to the Nevada Independent. “This program costs nothing to the state. It costs nothing to businesses. And it’s completely run on the fees of the participants.”
The bill passed the Nevada Senate’s Committee on Government Affairs last week, but that has happened in each of the previous two legislative sessions, which are held in odd-numbered years. Harris also sponsored a 2021 attempt to create a state-supported retirement plan, and that effort was halted in the Nevada Senate Committee on Finance. A 2019 version was introduced in the Nevada Assembly but did not get past the Nevada Assembly Committee on Ways and Means.
The current bill stipulates that the board is required to establish one or more investment funds and that the underlying investments of each fund must be diversified “so as to minimize the risk of large losses under any circumstances.” The board also may, at any time, add, replace or remove any investment fund.
The underlying investments may include shares of mutual funds, exchange-traded funds, publicly traded equity and fixed-income securities, as well as other investments available for investment. However, the investment funds would be prohibited from investing in any bond, debt instrument or other security issued by the state of Nevada.
Since 2012, 46 states have either implemented a state-based retirement savings program, studied program options or considered legislation, according to Human Interest Inc., a provider of 401(k) and 403(b) plans. There are currently 16 states and two cities that have either passed laws or have pending legislation that outlines new programs for private sector workers, with eight states having active laws.
However, the Nevada Chapter of the National Association of Insurance and Financial Advisors opposes the bill.
“While well-intentioned, we do not believe this proposal provides a meaningful step toward solving the retirement savings gap,” Neal Waters, a member of the NAIFA-Nevada Board of Directors, said in submitted testimony at a hearing on the proposed legislation. Waters added that these types of “state-facilitated retirement programs do not address the foundational reasons Americans are not saving more for retirement.”
Waters said the state’s private retirement plan marketplace already offers “diverse, affordable options to individuals and employers.”
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Tags: Dallas Harris, National Association of Insurance and Financial Advisors, Neal Waters, Nevada, Nevada Employee Savings Trust, Retirement Plan, SB 305, state-run