A New Retirement Savings Plan in North Carolina could soon help small business workers secure their financial future. Lawmakers have reintroduced a bill to create a “work-and-save” program, allowing employees to contribute to Individual Retirement Accounts (IRAs) through automatic payroll deductions. The initiative aims to support workers who lack employer-sponsored retirement plans, making saving for the future more accessible.
How the New Retirement Savings Plan in North Carolina Works
The proposed New Retirement Savings Plan in North Carolina will function as a public-private partnership. Employees will contribute through automatic payroll deductions to either traditional or Roth IRAs. While the program will be state-administered, financial institutions—both public and private—will manage the investment accounts. This setup ensures professional fund management while giving workers control over their savings, also learn more about Social Security Benefits for Workers in 2025
Benefits for Small Business Employees
The retirement program will particularly benefit small business employees who often lack access to employer-sponsored plans. Many laborers, factory workers, landscapers, and electricians struggle to save for retirement due to limited options. By contributing even a modest amount, such as $150 per month, workers can build substantial savings over time. The plan provides a structured, convenient way for employees to prepare for retirement without requiring direct employer contributions.
Program Structure and Enrollment
A newly formed North Carolina Small Business Retirement Savings Board will oversee the plan. The board will consist of 12 members, including representatives appointed by the governor, the General Assembly, and the state treasurer. The program will be voluntary for employers, meaning businesses can choose to participate rather than being required to enroll. Employees will be automatically enrolled but can opt out or adjust their contribution rates.
Features of the Retirement Plan
| Feature | Details |
| Account Type | Roth IRA (default) or Traditional IRA |
| Contribution Rate | Starts at 5% of salary, with optional increases |
| Portability | Accounts can be transferred if employees switch jobs |
| Employer Requirement | No mandate; voluntary participation |
Impact on Retirement Savings in North Carolina
Studies show that New Retirement Savings Plan in North Carolina could significantly benefit both workers and the state. Research from Pew Charitable Trusts suggests that over a decade, the plan could save North Carolina approximately $500 million in public assistance costs for older adults. Other states with similar “work-and-save” programs have seen employees accumulate over $1 billion in retirement assets since 2017, highlighting the program’s potential success. Check out Younger Retirees Depend on Social Security to plan accordingly.
Frequently Asked Questions
What is the New Retirement Savings Plan in North Carolina?
The New Retirement Savings Plan in North Carolina is a proposed state-administered retirement savings program allowing small business employees to contribute to IRAs through payroll deductions.
Who is eligible to participate?
Private-sector employees whose employers do not offer a retirement plan will be eligible. Employers must not have provided a tax-favored retirement plan in the past two years.
How does the program help small business employees?
The plan provides workers with an easy and automated way to save for retirement, ensuring financial security without employer contributions.
With increasing uncertainty about Social Security, programs like this offer a critical opportunity for small business employees to build retirement savings. The proposed New Retirement Savings Plan in North Carolina has the potential to provide long-term financial stability for thousands of workers across the state.
Final Words
The New Retirement Savings Plan in North Carolina provides small business employees with a convenient, automated way to save for retirement through payroll deductions. With no employer mandate, portability, and professional fund management, the program enhances financial security, reduces public assistance costs, and empowers workers to build long-term retirement savings independently.