In a place where saving for retirement is tough, some back state-run retirement fund

In a place where saving for retirement is tough, some back state-run retirement fund
Updated: Feb. 22, 2018 at 5:59 PM HST
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HONOLULU (HawaiiNewsNow) - Half of Hawaii's private sector workers have no savings for retirement, according to AARP.

That's created fears of a crisis when they leave the workforce, so lawmakers are considering a state-run retirement savings fund.

Senate Bill 2333 is up for a critical vote Friday morning, and it's getting some support from small business owners.

At Art Nelson Sailmaker in Kalihi, five full-time employees sew sails for boats.

Sailmaker Marcello Barra loves seeing his creations set sail, but saving for retirement has hit the doldrums.

"I haven't thought about it too much though I know I should be," he said.

Owner Larry Stenek says he can't afford the cost and time for an employee retirement plan.

"It's too difficult, it's not something we are focused on," Stenek said. "We focus on work, period."

He supports a bill that would establish a state board to administer a retirement savings plan for private sector employees.

Contributing to the fund would be voluntary.

"I think it's a good idea especially for me because I don't have time to think about that stuff," said Barra.

But the National Association of Insurance and Financial Advisors in Hawaii is against the bill.

"We do not believe that a state-run plan that competes with private market plans is the answer. Availability and access to retirement savings options are not the problem," wrote executive director Cynthia Takenaka in her testimony to the state Legislature.

It favors retirement education instead.

The state Department of Budget and Finance considers the bill premature and favors a study first.

The AARP supports it, saying workers can save a little now and watch it grow over time.

"We have a real problem of people retiring into poverty if we don't turn the tide," said Barbara Stanton, state director of AARP Hawaii.

Seven states have some form of state retirement savings fund.

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