Keystone Saves Would Increase Retirement Security in Pennsyl

Keystone Saves Would Increase Retirement Security in Pennsylvania


Rotunda at the Pennsylvania Capitol Harrisburg.
Dwight Nadig
The Pew Charitable Trusts urges the creation of Pennsylvania’s Keystone Saves. This state-facilitated retirement savings program for businesses without a retirement plan relies on 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 with administration and investment fees kept low through the economies of scale created by a statewide program. Among its many important benefits, the program would:
Give businesses a no-cost retirement benefit for their workers
Keystone Saves would apply to businesses that have five or more employees, do not otherwise offer a retirement plan such as a 401(k), and have been operating in the commonwealth for more than a year. The employer’s only role would be registering for the program and facilitating workers’ payroll contributions—a task often delegated to payroll providers. Participating employers would make no contributions of their own and would have no legal responsibility for the program beyond remitting savers’ contributions. And employers could opt out by starting their own plan at any time.

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