News Summary
Rhode Island has introduced the RISavers Retirement Savings Plan to support workers in companies without existing retirement plans. Launched on October 21, this initiative targets over 170,000 workers who lack employer-sponsored retirement options. Businesses with five or more employees must register for the plan and establish automatic payroll contributions to a Roth IRA. The program aims to provide accessible retirement savings solutions and is overseen by the Bank of New York. The initiative is a response to retirement savings gaps affecting many workers.
Rhode Island has officially launched the RISavers Retirement Savings Plan designed for workers employed at companies without existing retirement plans. The announcement was made on Tuesday, October 21, at the Narragansett Brewery, where state officials gathered to unveil the initiative. This program is a critical step toward addressing the needs of an estimated 40% of working Rhode Islanders—over 170,000 people—who currently lack access to an employer-sponsored retirement savings plan.
The RISavers program is implemented in partnership with Connecticut’s state-run retirement savings program for private-sector employees, emphasizing a cross-state strategy to help workers save for retirement. State lawmakers approved the creation of RISavers more than a year ago, and the formal launch marks a significant advancement in retirement planning accessibility.
Under the new program, businesses with five or more employees are required to register if they do not currently offer a tax-qualified retirement plan. The Narragansett Brewery was one of the first companies to register for the program following the opening of the sign-up portal on October 15. Employers participating in RISavers will bear no costs beyond the administrative time required to register and set up the program.
Upon registration, employers must establish automatic payroll contributions to a Roth IRA for their employees. Workers will be automatically enrolled in the plan unless they choose to opt out. The default savings rate is initially set at 5% of an employee’s gross pay, and this rate will automatically increase by 1% each year until it caps at 10% of their compensation. Employees have the flexibility to change their default savings rate, and they can access their RISavers funds at any time, even if they switch jobs or retire.
While there are advantages to participating in RISavers, account balances are subject to market performance and are not guaranteed or insured by any organization. An annual fee of $26 will apply, along with a 0.2% asset-based fee and a 0.036% underlying investment fee charged to savers for account maintenance. The Bank of New York will oversee the day-to-day operations of the program and provide essential services such as fund accounting and customer support.
Rhode Island Governor Dan McKee commended the leadership of General Treasurer James Diossa in implementing this significant program, as it aims to ensure a dignified and secure retirement for the state’s workforce. Treasurer Diossa expressed enthusiasm about the potential savings opportunities RISavers could generate, drawing parallels to previously successful similar programs in Connecticut.
During the launch event, Connecticut Comptroller Sean Scanlon resonated on the initiative’s importance by sharing personal anecdotes regarding retirement planning, particularly stressing the necessity for accessible retirement savings options. The initiative is aimed squarely at hard-working individuals, and it signifies an essential response from state authorities to retirements savings gaps that have persisted amid delays and inaction on a federal level.
Employers and employees can expect to receive detailed communication regarding the enrollment process in the coming weeks. Additionally, the RISavers website will provide a checklist to help guide employers through registration and implementation of this retirement savings program, ensuring a smooth transition for all parties involved.
Deeper Dive: News & Info About This Topic
- Providence Journal: RI is Creating a State-Run Retirement Program
- Wikipedia: Retirement
- Providence Journal: RI Rolls Out Retirement Plan
- Google Search: Retirement Savings Programs
- Pensions & Investments: Rhode Island Passes Retirement Savings Program Bill
- Google Scholar: State Run Retirement Plans
- Providence Journal: State Sponsored Retirement Plans in RI
- Encyclopedia Britannica: Retirement Savings
Author: STAFF HERE PROVIDENCE WRITER
The PROVIDENCE STAFF WRITER represents the experienced team at HEREProvidence.com, your go-to source for actionable local news and information in Providence, Providence County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as WaterFire, Rhode Island International Film Festival, and Rhode Island Comic Con. Our coverage extends to key organizations like the Greater Providence Chamber of Commerce and Providence Warwick Convention & Visitors Bureau, plus leading businesses in finance and manufacturing that power the local economy such as Citizens Financial Group and Textron. As part of the broader HERE network, we provide comprehensive, credible insights into Rhode Island's dynamic landscape.
