Rep. Christine Chandler. Photo by Maire O’Neill/losalamosreporter.com
BY REP. CHRISTINE CHANDLER
House District 43
As a former employment and benefits attorney at Los Alamos National Laboratory, I know firsthand how employees benefit from employer sponsored savings plans. Retirement plans provide security for employees in their older years and are great incentive to keep top talent at your place of business.
Unfortunately, LANL retirees are the exception across New Mexico. Roughly 336,000 private sector New Mexicans do not have access to a retirement savings plan at work. And if you are working for a small business, you are even less likely to have a plan – 76% of our small business employees don’t have access. For these workers, each passing day means less time to grow the savings they need for a more secure future.
With less than 40% of New Mexico’s private sector workers with access to retirement savings plans through their jobs –New Mexico has the lowest rate in the nation. This is a major reason why 80% of New Mexico’s workers have $10,000 or less saved for retirement. Some New Mexicans are retiring with more debt than savings! Last year, UNM’s Bureau of Business and Economic Research reported that 56% of employed New Mexicans actually have NO retirement savings at all. New Mexico is facing a retirement savings crisis that will leave far too many of our residents barely able to afford their basic needs in their older years.
That is why I am a proud original co-sponsor of the New Mexico Work and Save Act (House Bill 44.) This important bill creates a system of voluntary state-sponsored Individual Retirement Accounts that private sector workers can contribute to using automatic payroll deductions. Participation is completely voluntary for both businesses and workers. Businesses (and nonprofits) choose whether they would like to offer the payroll deduction IRAs to their workers, and workers choose whether or not to participate and how much they would like to save from each paycheck.
People cannot be forced to save – that’s a personal choice. But, research shows that workers are 15 times more likely to save for retirement when they are able to have the savings automatically deducted from their paychecks. By helping New Mexico’s small businesses access a simple, low-cost retirement savings option, more hard-working New Mexicans will finally get the chance to do just that. And we know that New Mexico workers will take full advantage of this opportunity. In a recent AARP survey, 85% of workers without access to a workplace savings plan currently said they would use one if it were available.
Passage of the New Mexico Work and Save Act (HB 44) is an all-around win for New Mexico.