June 20, 2006
LANSING – Governor Jennifer M. Granholm today unveiled her plan to make an affordable retirement savings program available to small business workers and the self-employed across Michigan. Granholm first announced the state’s commitment to developing this program, known as MI Retirement, in her 2006 State of the State address.
“MI Retirement can make a financially secure future a reality for tens of thousands of workers across Michigan,” Granholm said. “This program gives small business a new tool to recruit and retain employees and gives employees an easy way to save for retirement.”
MI Retirement will make a savings plan similar to a 401K available to small businesses in Michigan at little or no cost. The program eliminates many of the barriers, including administrative oversight and cost, that prevent small businesses from providing a retirement plan for their employees. Currently, just 30 percent of small businesses with fewer than 25 employees offer retirement plans.
Granholm said research clearly indicates that when retirement savings plans are available, employees take advantage of them. Eight of ten employees in businesses that offer retirement plans are saving for retirement, while just four in ten will seek out individual savings plans if one is not available through work.
“The benefits of increased savings are clear,” said Granholm. “Workers can enjoy a higher quality of life in retirement, and the demand for state services, including health care and social services, decline.”
Once MI Retirement is up and running, the state will turn over operations to a private or nonprofit pension management company.
The legislation creating the MI Retirement program is sponsored by Senator Buzz Thomas (D-Detroit) and Representative Steve Bieda (D-Warren).
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