Ohio Senate Bill 135, as amended to the budget bill, enables auto-enrollment for state and local government employees EXCLUSIVELY in the Ohio Public Employees Deferred Compensation Program.
This bill will limit governmental employer and employee choice and effectively create a public monopoly for retirement savings in Ohio. Senate bill 135 makes alternative 403(b) and 457(b) plans futile as employees would have to opt out of the Ohio Public Employees Deferred Compensation Program to do business with you and stick rates for auto-enrollment are extremely high.
Public employees are already saving for retirement and there may not be a need for automatic enrollment. For example, in Ohio, most public employees are mandated to contribute at least 10% of their pay into the Ohio Public Employees Retirement System and School Employees Retirement System of Ohio plans, and teachers are mandated to contribute 14% to the State Teachers Retirement System of Ohio. Further, there are advantages to saving in 403(b) plans where they are an option for Ohio’s public employees (“public education institutions”).
One size does NOT fit all. The State’s selection of a default contribution rate and a choice of investment for the employees’ contributions raise potential problems because employees vary in age, outside savings, income, debt obligations, and funding needs when they retire. Public employees would be better served by working with a trusted advisor to choose retirement savings options that are best suited to their individual circumstances.
Tell the Ohio legislature that S.B. 135 should not pass into law. Protect employer and employee retirement savings choice.
